Were you self-employed, a gig worker, a sole proprietor, a 1099 contractor, or a freelancer during government-mandated shutdowns in 2020 and 2021? If so, you could be eligible for a significant tax credit. Shockingly, an estimated 80 million self-employed Americans who qualify for the Self-Employed Tax Credit (SETC) still haven’t claimed what’s rightfully theirs.
The COVID-19 pandemic turned the world upside down in early 2020, and few felt its impact more deeply than self-employed individuals. The sudden economic shifts thrust countless self-employed individuals into uncharted territory, scrambling to adapt and stay afloat.
To help self-employed individuals recover and thrive, the federal government introduced the Self-Employed Tax Credit (SETC) — a financial lifeline for those who kept the economy moving during tough times. So, what exactly is the SETC, and how can you determine if you qualify?
The SETC is a powerful financial support tool created to help independent workers who faced economic setbacks during the COVID-19 pandemic. It’s more than just a credit — it’s a lifeline for those working through one of the most challenging times in history.
The SETC is rooted in the federal Sick Leave and Family Leave Tax Credits, established under the Families First Coronavirus Response Act (FFCRA) and expanded by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. These measures were designed to recognize the essential role of self-employed individuals and offer them the same kind of relief that traditional employees received from their employers.
SETC is available to individuals who meet specific criteria for financial hardships experienced during the COVID-19 pandemic. You could qualify if you worked for yourself in any capacity and faced income loss due to illness, caregiving, or government-mandated shutdowns in 2020 or 2021.
The SETC is for all self-employed professionals. Eligibility for the SETC includes United States citizens or qualified permanent residents who are eligible self-employed individuals, such as:
You may be eligible if:
Certain conditions could affect your eligibility:
The SETC is a refundable credit, meaning you can still receive the benefit even if you don’t owe taxes. It’s not just financial relief — it’s an acknowledgment of the essential role self-employed workers played in keeping the economy moving during a difficult time.
If you’re eligible for the Self-Employed Tax Credit, the next step is figuring out how much you can claim. Don’t worry — it’s more straightforward than it sounds, and we’re here to guide you every step of the way.
If you and your spouse are self-employed, you can each claim up to the maximum SETC credit, provided you don’t overlap on the same qualifying COVID-19 days. That means double the potential relief for households with two self-employed earners.
To calculate your refund, you must fill out IRS Form 7202. This form will guide you through:
Now that you know the Self-Employed Tax Credit, why it matters, and how to calculate your potential refund, it’s time to claim it. The process might seem daunting, but we’ll break it down into simple, manageable steps so you can secure the money you’ve earned.
Use a reliable estimator tool to get a ballpark figure of your potential refund. This will help you understand what’s at stake and motivate you to see the process through.
Make sure you have:
This is where the math happens. Form 7202 asks for:
Don’t forget: Accuracy matters. Double-check your numbers and documentation to avoid delays or missed opportunities.
Once you’ve completed Form 7202, attach it to your tax return for the applicable year and file everything with the IRS. Be sure to include all required documents to back up your claim.
This process can feel a little overwhelming. Even seasoned certified public accountants (CPAs) sometimes turn to specialized services for SETC filings. If you’re not confident about tackling it on your own, reach out to experts who can handle the details and ensure you don’t leave any money on the table.
At Gig Worker Solutions, we’re all about simplifying the complex so you can focus on what you do best. When claiming the Self-Employed Tax Credit, we’ve got your back with the tools, resources, and expert support you need to make the process a breeze.
From easy document uploads to secure filing tools and friendly reminders about deadlines, Gig Worker Solutions is here to make claiming your SETC credit smooth and stress-free. Don’t leave money on the table — let’s get started today.