Calculating the SETC Tax Credit Refund
After determining your eligibility for the SETC Tax Credit, the subsequent step involves calculating your potential credit amount.
You can find out how in the following details. The SETC Tax Credit amount is influenced by your daily self-employment income on average and the number of workdays missed due to COVID-19 effects.
For instance, the qualified sick leave equivalent amount is equal to the lower of $511 or all of your average daily self-employment income for a set number of days where you were unable to work because of reasons like being quarantined or experiencing COVID-19 signs.
On the other hand, the qualified paid family leave equivalent amount is the lower of $200 USD or what is the setc tax credit 67% of your daily income from self-employment on average.
This is applicable for days when you couldn’t perform services due to COVID-19 related reasons.
Moreover, if both setc tax credit you and your spouse are self-employed, you can each claim a maximum SETC Tax Credit limit, provided you don't share the qualifying COVID days.
To calculate your SETC Tax Credit, you would use IRS Form 7202, which factors in eligibility based on self-employment status and COVID-related interruptions, as well as the family leave tax credit.