Understanding SETC Limitations and Restrictions
Despite the significant benefits of the SETC Tax Credit, it is crucial to understand its limitations and restrictions.
For example, claiming the SETC may increase your adjusted gross income, which could impact your eligibility for other tax credits and deductions.
The good news is, the SETC is not treated as taxable income, so no extra tax liability will be generated by the credit.
Nonetheless, there are some restrictions you should be aware of.
The entire SETC amount is not claimable if you received wages follow this link for sick or what is the setc tax credit family leave from your employer, or unemployment benefits during 2020 or 2021.
Also, if you missed the initial tax return filing but wish to claim or adjust SETC credits, you can do so by filing an amended return within the prescribed deadlines for the 2020 and 2021 tax returns.