The COVID-19 pandemic brought unprecedented challenges, especially for self-employed individuals who had to balance work with the additional responsibilities of caring for children or other dependents, such as elderly parents. Many self-employed professionals faced significant disruptions, leading to lost work time and income. If you found yourself in this situation, there’s good news: the Self-Employment Tax Credits (SETC) may be available to help offset these losses.
The Impact of the Pandemic on Self-Employed Parents and Caregivers
During the pandemic, schools and daycare centers closed, and many caregiving services were unavailable. As a result, self-employed parents and caregivers had to take on additional responsibilities at home, often leading to reduced working hours or an inability to work entirely. This shift created financial strain for many, making it difficult to manage both professional and personal responsibilities.
What is the SETC?
The Self-Employment Tax Credits (SETC) are the Emergency Paid Sick Leave Act (EPSLA) and Expanded Family Medical Leave Act (Expanded FMLA) tax credits authorized under the American Rescue Plan (ARP). These self-employment tax credits (SETC) are designed to provide self-employed individuals with the relief they would have been entitled to, had they worked for a qualified W2 employer, for enduring disruptions in their work due to the pandemic. These credits can be highly beneficial for those who had to care for children or dependents, leading to lost work time and income.
How Caring for Children or Dependents Qualifies You for the SETC
To qualify for the SETC, you need to demonstrate that your work was significantly impacted by the pandemic due to caregiving responsibilities. This includes:
- Personal Illness: If you were exposed to COVID-19, developed symptoms of COVID-19 and were required to quarantine under government order while awaiting test results, took time off to get a COVID-19 vaccine, or were unable to work due to illness/injury related to vaccination.
- Illness of Others: If someone you were caring for was exposed to COVID-19, developed symptoms of COVID-19 and were required to quarantine under government order while awaiting test results, took time off to get the person a COVID-19 vaccine, or were unable to work due to caring for the person while they experienced illness/injury related to vaccination.
- School Closures: If you had to stay home to care for dependent children or disabled adult dependents because their school or daycare was closed.
- Dependent Care: If you were responsible for caring for a dependent child or disabled adult dependent whose usual care facility was closed or unavailable due to the pandemic.
- Health Concerns: If you had to care for a child or disabled adult dependent who contracted COVID-19 or was advised to quarantine due to exposure.
How the SETC Can Benefit You
The SETC is designed to provide financial relief to self-employed individuals who faced challenges due to government mandates, personal illness, and caregiving responsibilities during the pandemic. This credit can help offset the income you lost and provide a much-needed financial cushion. The credit is calculated based on your net earnings from self-employment, and it can significantly reduce your overall tax burden.
Get Help from Knowledgeable Team at Pinnacle Minds
Navigating the complexities of tax credits can be challenging, especially when dealing with the additional stress of self-employment. Pinnacle Minds is here to help. Our experienced team of former IRS Auditors specializes in helping self-employed individuals claim the tax credits they deserve, including the SETC. We can guide you through the application process, helping you get the financial relief you’re entitled to.
If you were balancing work and caregiving during the pandemic, don’t miss out on the SETC. Contact Pinnacle Minds today to learn more about how we can assist you in applying for this valuable tax credit.
Reach out to Pinnacle Minds now and take the first step toward financial relief and stability. Your future self will thank you!
