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What is the Self Employed Tax Credit Refund?

Learn more about how you can get up to $32,220 back in Self Employed Tax Credit (SETC). 

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The Self Employed Tax Credit (SETC) Refund is a provision under the Families First Coronavirus Response Act (FFCRA) introduced by the IRS. This act was established in response to the COVID-19 pandemic. The SETC specifically offers tax credits to self-employed individuals.

These credits are akin to those provided to employers under the FFCRA, which were intended to financially assist employers in offering paid sick leave and expanded family and medical leave to employees for reasons related to COVID-19. The goal of the SETC is to extend similar support to self-employed individuals, acknowledging the challenges they faced during the pandemic, especially in terms of maintaining income while dealing with health-related issues caused by COVID-19.

Who is Eligible for SETC/FFCRA?

You are a self-employed individual, which could include:

  • Running a freelance business where you provide services to another company but are not directly employed by them
  • Earning income via e-commerce sites like eBay, Etsy, Amazon, etc.
  • Rideshare, food, or product delivery drivers
  • Independent contractors (1099 workers)
  • Sole proprietors
  • Gig workers

You filed a Schedule SE of IRS Tax form 1040 in 2020 and/or 2021 and had a positive net income and paid self-employment tax on your earnings.

You missed work due to COVID related issues (includes care-taking)

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Potential Credit Amount

  • Self-employed individuals can receive a tax credit refund up to $32,200.
  • Based on net earnings in 2020 and 2021.

Expanded Coverage by CARES Act

  • Includes freelancers, independent contractors, and gig workers.
  • Tax credits cover lost income due to COVID-related issues.

Benefits for Self-Employed Individuals

  • Reimbursement for periods of COVID-19 related sick leave.
  • Claimed on income tax returns.

Qualifying Events for SETC/FFCRA

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The FFCRA provides eligibility for paid sick leave to 1099 contractors and self-employed individuals who couldn’t work or telework due to COVID-19. Some of the qualifying reasons for this include, among others:

  • Being under a quarantine or isolation order at the federal, state, or local level.
  • Receiving a recommendation from a medical professional to self-quarantine.
  • Experiencing symptoms of Coronavirus and seeking medical evaluation.
  • Providing care for someone under quarantine or isolation, or a child whose school or daycare is closed.
  • Getting vaccinated for COVID-19.*
  • Recovering from any illness related to the COVID-19 vaccination.*
  • Awaiting or obtaining results from a COVID-19 test.*

*These reasons are applicable for credit claims for the period from April 1, 2021, to September 30, 2021.