Calculating the SETC Tax Credit Refund
Once you've established that you qualify for the SETC Tax Credit, the subsequent step is to calculate your potential credit amount.
You can find out how in the following details. The SETC Tax Credit amount is determined by your average daily self-employment income and the total workdays you missed due to COVID-19 effects.
For instance, the sick leave credit amount is equal to the lesser of $511 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 quarantine or experiencing COVID-19 signs.
On the other hand, the qualified paid family leave equivalent amount is the lower of $200 or two-thirds of your daily income from self-employment on average.
This is applicable for the days in which you couldn’t perform services due to COVID-19 related circumstances.
Moreover, if you and your spouse are self-employed, you can each claim up to a specified SETC Tax Credit limit, apply for setc tax credit provided you do not share the qualifying days related to COVID.
To determine your SETC Tax Credit, you would use IRS Form 7202, which takes into account eligibility according to self-employment status and what is the setc tax credit COVID-related interruptions, as well as the family leave tax credit.