Calculating the SETC Tax Credit Refund
After determining your eligibility 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 number of workdays missed due to COVID-19 impacts.
For instance, the qualified sick leave equivalent amount equates to the lesser of $511 USD or 100% of your average daily self-employment income for a certain number of days when you were unable to work because of reasons like quarantine or experiencing COVID-19 signs.
On the other hand, the qualified paid family leave equivalent amount is the lesser of $200 or two-thirds of your daily income from self-employment on average.
This applies for the days in which you were unable to work because of COVID-19 related circumstances.
Moreover, if both you and your spouse are both self-employed, you can both claim up to a specified SETC Tax Credit limit, as long as you don't share the qualifying COVID days.
To determine your SETC Tax Credit, you would use IRS setc tax credit Form 7202, which factors in eligibility according to self-employment status and COVID-related disruptions, as well as the family leave tax credit.