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The Paid Leave Credit: A Lifeline for Self-Employed Individuals During Challenging Times

by | 26 January, 2024

Explore the Self-Employed Tax Credit (SETC) as a vital aid for self-employed individuals during COVID-19, offering financial relief and stability.

Being self-employed in the era of COVID-19 has been like navigating a ship in a storm. The pandemic brought unprecedented challenges, but there’s a beacon of hope: the Self-Employed Tax Credit (SETC). Introduced as part of the Families First Coronavirus Response Act (FFCRA) in March 2020, this credit is a critical support for self-employed individuals. Let’s dive into what the SETC is and how it can help you.

The Start of Self Employed Tax Credits (SETC)

The SETC came to life with the FFCRA, passed by Congress to provide paid sick leave and dependent care leave during the Covid-19 pandemic. As the situation evolved, the Consolidated Appropriations Act extended the FFCRA’s timeframe. Then, in March 2021, the American Rescue Plan (ARP) further expanded these benefits, offering additional paid leave for those affected by the pandemic.

A Glimpse at the Numbers

Self employed person checking papers for her business
In 2020, over 15 million self-employed workers in the U.S. faced the brunt of the pandemic. Businesses froze, and income streams dried up. The SETC emerged as a crucial aid, offering a tax credit of up to $32,220 to help self-employed individuals recover and move forward.

Who Qualifies for the SETC?

If you’re a self-employed individual or sole proprietor who missed work due to Covid-19 related reasons, you might be eligible. This includes time off for vaccinations, quarantine, illness, or childcare. Here’s a breakdown:

  • Sick Leave: This covers situations like being under quarantine, experiencing COVID-19 symptoms, seeking a medical diagnosis, caring for someone with a COVID-19 diagnosis, and childcare disruptions due to the pandemic.
  • Family Leave: Initially for childcare when schools or facilities were closed, the ARP expanded this to include all qualifying reasons for paid sick leave.

Expanded Coverage

Freelancer relaxing after receiving tax credits

The ARP went a step further, including time off for COVID-19 vaccinations, recovery from related illnesses, or accompanying someone for immunizations. It also covers caring for individuals recovering from an illness or condition related to COVID-19 vaccinations.

Is the SETC Right for You?

If you’ve faced work interruptions due to the pandemic, the SETC could be a significant financial relief. Whether it was for your own health, caring for a loved one, or managing childcare challenges, this tax credit is designed to ease the burden.

Next Steps

Woman computing her expenses and checking if she is qualified for SETC
Understanding and accessing the Self-Employed Tax Credit (SETC) can be a pivotal moment for self-employed individuals in these challenging times. If you’re seeking to stay on top of the latest information or require assistance with the SETC process, consider subscribing for updates or reaching out to Fast Tax Credits. We are here to support you in smoothly navigating these complexities. In conclusion, the SETC is more than just a tax credit; it’s an essential lifeline for self-employed individuals during the COVID-19 pandemic. By comprehending its scope and checking your eligibility, you can take an important step towards financial recovery and stability. Remember, staying informed and proactive is crucial in these unprecedented times. Let Fast Tax Credits help you with a seamless application process, ensuring you make the most of this opportunity.