Calculating the SETC Tax Credit Refund
Once you've established that you qualify for the SETC Tax Credit, the subsequent step involves calculating your possible refund amount.
You can learn how below. The SETC Tax Credit amount is determined by your daily self-employment income on average and the number of workdays missed due to COVID-19 impacts.
For instance, the qualified sick leave equivalent amount equates officialsetcrefund to the lower of $511 USD or all of your average daily income from self-employment for a certain number of days when you couldn’t work because of reasons like being quarantined or having COVID-19 signs.
On the other hand, the family leave credit amount is the lesser of $200 USD or two-thirds of your average daily self-employment income.
This applies for days when you were unable to work due to COVID-19 related circumstances.
Moreover, if you and your spouse are both self-employed, you can each claim up to a specified SETC Tax Credit limit, as long as you don't share the qualifying days related to COVID.
To calculate your SETC Tax Credit, you would use IRS Form 7202, which takes into account eligibility based on self-employment status and COVID-related disruptions, as well as the family leave tax credit.