Self-employed and still getting back on track from COVID? We can help.
We built the first-ever tool to help you get the federal SETC tax credits that you deserve – safely, quickly, and easily.
What's SETC?
The Self Employment Tax Credit was introduce with the Cares ACT in 2020
Eligibility
Did you miss work due to:
- Federal, state, or local lockdown orders related to COVID-19
- Quarantining or isolation order related to COVID-19
- Caring for your child whose school had closed or gone virtual
- Caring for your child because your child care provider was unavailable due to COVID-19
- Symptoms of COVID-19 or seeking a medical diagnosis
- Sickness due to vaccination side effects
- Caring for someone with COVID symptoms
- A COVID-19 vaccination appointment
- Side effects due to vaccination
Let's find out if you qualify.
The SELF EMPLOYMENT TAX CREDIT Explained
Initially the Families First Coronavirus Response Act (FFCRA) focused on employers with W-2 employees to help them weather the economic impact caused by the pandemic. Thanks to the FFCRA expansion, self-employed individuals, freelancers, independent contractors, and gig workers are now eligible for Self Employement Tax Credits (SETC) that pay you back for the time you would’ve normally spent earning money that was lost because of COVID.
Why choose JORNS?
Our proprietary software and professional team of CPAs have assisted thousands of businesses retain billions of dollars in stimulus funding
Professional Support
Although our process is quick and painless, when you have questions, we have answers with a dedicated team of support specialists.
Lightning Fast Results
Our streamlined process allows for faster results, which mean faster funding.
Audit Protection Included
If you get audited, we will supply all criteria and assist in responding to the IRS.
FAQ
No. This is not a loan. It’s a refundable tax credit. When we file your SETC claim, we request a refund check for you.
A self-employed person in the United States, as defined by the Internal Revenue Service (IRS), is generally considered someone to who the following applies:
- You carry on a trade or business as a sole proprietor or an independent contractor.
- You are a member of a partnership that carries on a trade or business.
- You are otherwise in business for yourself (including a part-time business or a gig worker).
No. You cannot claim double benefits on days you already received payments from unemployment insurance claims.
The dates you can claim under FFCRA income tax credit are between April 1, 2020 – March 31, 2021 and up to 10 days for dates between April 1, 2021 – September 30, 2021.
Here is a breakdown of the days:
Childcare related time off – up to 110 days
- 50 days between April 1, 2020 and March 31, 2021
- 60 days between April 1, 2021 and September 30, 2021
Yourself or loved one (other than child) – up to 20 days
- 10 days between April 1, 2020 and March 31, 2021
- 10 days between April 1, 2021 and September 30, 2021
To qualify for SETC credits, you must have missed work because of COVID-related issues.
If you were unable to work because of one of these reasons, you may be eligible:
- A government agency imposed a quarantine or isolation order.
- Your doctor recommended you self-quarantine.
- You were having COVID-19 symptoms while also waiting for an appointment with your doctor.
- You were waiting for COVID-19-related test results.
- You were getting vaccinated against COVID-19
- You were experiencing side effects from the COVID-19 vaccine.
- You took care of your children who were affected by school or daycare shutdowns.
- You took care of someone else/family members who had COVID-19 issues.
If the self-employed individual is unable to work, the credit is calculated by multiplying the number of days on leave and taking whichever amount is smaller:
- Your average daily self-employment income of year, or
- $511.
If you are unable to work (or telework) to take care of a family member who is under quarantine or to take care of a child whose child care is unavailable, the credit is calculated by multiplying the number of days on leave and taking whichever amount is smaller:
- ⅔ of your average daily self-employment income, or
- $200.
We will use line 6 of the Schedule SE on your personal tax return to determine your annual pay, that is then divided by 260 (Considered the standard amount of working days in a year) to calculate your daily rate.
From there, we must determine which reason the leave was taken, and that will decide what rate can be paid for the dates being claimed. For self leave, we claim your full daily rate up to $511/day. Family or childcare leave is calculated as 2/3rds of your pay, up to $200/day.
This is how the process works: If you wish to move forward, you will sign the engagement agreement, select your desired payment option, and we will gather the data, run the calculations, build your qualification report, and file your claim. Once filed, the IRS can take up to three weeks to acknowledge the acceptance of your SETC application and up to 20 weeks from that acceptance to receive your refund via check or direct deposit.
The total FFCRA Tax credit can be up to $32,200.00 and is based on your net earnings in 2020 and in 2021.
You will have to calculate your daily average of self-employment income. This is your net earnings for the taxable year divided by 260 (the standard recognized amount of working days in a year). This allows the IRS to estimate how much you lost in wages for everyday you were unable to work.
The IRS defines a dependent as either a qualifying child or relative of the taxpayer. The relative can be your child, stepchild, foster child, sibling, parent, grandparent, grandchild, aunt, uncle, niece, nephew, or certain in-law relationships.
The Child Tax Credit helps families with qualifying children get a tax break. To have received a Child Tax credit or a credit for other dependents, you would have had to submit a Schedule 8821.
A child must have lived with you for more than half of the tax year. Temporary absences, such as for education or medical care, are generally counted as periods of living with you. You must have provided more than half of the relative’s total support during the tax year. The relative’s gross income must be below a certain threshold determined annually by the IRS (subject to change). It’s important to note that these are just general guidelines, and there may be additional rules and exceptions. The IRS provides detailed information in publications such as IRS Publication 501.
Examples of a Dependent:
- Child
- Parent
- Brother/Sister
- Stepparent/Stepchild
- Adoptive Daughter/Adoptive Son
- Stepbrother/Stepsister
- Half Brother/Half Sister
- Grandparent/Grandchild
- Son-in-law/Daughter-in-law
- Mother-in-law/Father-in-law
- Brother-in-law/Sister-in-law
- Uncle/Aunt
- Niece/Nephew
Yes! This is what the SETC was designed to cover, especially since many entrepreneurs fall into this category.
No. You can only use days you took care of your dependent.
Yes. If the physical location where your child received instruction or care is now closed, the school or place of care is “closed” for purposes of paid sick leave and expanded family and medical leave. This is true even if your child is still expected or required to complete assignments.
Refunds for 2020 and 2021 will be sent to you directly by the IRS via check to the address provided on your SETC application.
We’re sorry, but Jorns is unable to help W2 employees with filing for the SETC. You may still qualify for credit depending on if your employer filed for ERC on your behalf. Consult a CPA for your specific situation.
The Child Tax Credit helps families with qualifying children get a tax break. To have received a Child Tax credit or a credit for other dependents, you would have had to submit a Schedule 8821.
We understand the Covid-19 pandemic affected everyone globally. If you did not have positing earnings in 2020 because of Covid-19 restrictions, we can use your 2019 net income.
Yes, but parents can not claim the same dates twice.