Hello and welcome to SETC Automatic's self-employment tax credit journey"

You may be eligible for up to $32,200 from the IRS

Imagine, in a nation where 80 million individuals, from Uber drivers to plumbers, are tirelessly paving their way to success, there exists a beacon of hope – the self-employment tax credit.

Find Out if you qualify

This isn’t just a policy; it’s a lifeline, tailor-made for hardworking individuals like you. Dealing with the challenges of COVID-19…..

There’s a fully refundable tax credit waiting for you, a chance to claim up to $32,220!”

What Is The FFCRA Tax Credit —Families First Coronavirus Response Act?

 In March 2020, a pivotal moment arrived for businesses with the introduction of the Families First Coronavirus Response Act (FFCRA). Designed as a lifeline during the early days of the COVID-19 pandemic, the FFCRA was a crucial step in supporting companies. It focused on enabling them to provide essential paid sick leave and unemployment benefits in these unprecedented times, primarily aiding employers with W-2 employees.

As the year progressed, the landscape of support evolved. In December 2020, a significant expansion came into play with the passing of the Coronavirus Aid, Relief, and Economic Security (CARES) Act by Congress. This act broadened the horizons of the FFCRA. What was initially a resource for employers now opened its doors to a wider audience – the self-employed.

The CARES Act’s extension of the FFCRA’s provisions marked a turning point for self-employed individuals, freelancers, independent contractors, and gig workers. These diverse professionals now found themselves eligible for tax credits, a vital measure that recognized and compensated for their lost income due to COVID-related challenges. It was a recognition of the potential income these individuals would have generated under normal circumstances.

The FFCRA’s expanded reach has been a beacon of hope and support, acknowledging the diverse ways in which the workforce contributes to the economy. It’s a testament to the resilience and adaptability of both businesses and independent professionals in the face of global adversity.

THIS FORM IS THE FIRST STEP TO SEEING IF YOU QUALIFY FOR THE "Self Employed TAx Credit" FROM THE IRS!

We do not charge our clients unless we are able to get them an SETC IRS refund!

QUALIFICATIONS

ARE ANY OF THESE APPLICABLE?

  • 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

Simplifying Your Tax Filing Journey with SETC Automatic

CALCULATE YOUR FFCRA TAX CREDIT

Dealing with the IRS filing process can often feel like navigating a labyrinth – complex, demanding, and filled with potential pitfalls. If you’re self-employed, you’re no stranger to these challenges. But what if you could put these worries behind you?

Welcome to SETC Automatic, where we understand that being self-employed should not mean tackling tax complexities solo. Our expertise lies in demystifying and managing the intricate process of amending your tax returns and ensuring your applications are flawlessly submitted to the IRS.

With SETC Automatic by your side, you can say goodbye to the uncertainty over paperwork, the second-guessing of your calculations, and the endless waiting for approval. Instead, you can redirect your energy and focus back to what you do best: nurturing and growing your business. Let us handle the taxing details, so you can enjoy the peace of mind that comes with professional support.

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Frequently Asked Questions

What is the FFCRA?

The Families First Coronavirus Response Act, or FFCRA, was a pivotal legislative response introduced in 2020. It emerged as one of the initial steps taken by the government to assist small business owners. The primary goal was to provide financial support for sick leave necessitated by the COVID-19 pandemic.

Who did the FFCRA originally help?

Initially, the FFCRA was designed to aid small businesses. It specifically targeted employees within these organizations, ensuring that businesses could afford to provide paid sick leave during the challenging times brought about by the pandemic.

Has the scope of the FFCRA expanded since its inception?

Yes, the FFCRA underwent a significant expansion in 2021. This expansion was geared towards encompassing a broader group of beneficiaries. It now includes U.S. citizens who were self-employed during the COVID-19 pandemic. The updated provisions of the FFCRA recognize the financial hardships faced by self-employed individuals due to lockdowns or illnesses, whether their own or those of family members, thereby offering them much-needed support.

 

What are the specific periods for claiming the FFCRA income tax credit, and how many days can I claim?

The eligibility for claiming the FFCRA income tax credit is categorized into two distinct periods, each with a specified number of days you can claim:

  1. Childcare-Related Time Off:

    • For the period from April 1, 2020, to March 31, 2021, you can claim up to 50 days.
    • For the subsequent period from April 1, 2021, to September 30, 2021, you can claim up to an additional 60 days.

  2. Time Off for Yourself or a Loved One (Other Than Child):

    • Between April 1, 2020, and March 31, 2021, you can claim up to 10 days.
    • For the period extending from April 1, 2021, to September 30, 2021, another 10 days can be claimed.

In total, this allows for up to 110 days for childcare-related time off and up to 20 days for time off taken for yourself or caring for a loved one other than a child.

How do self-employed individuals qualify for FFCRA credit, and how is it calculated?

As a self-employed individual, you are eligible for the Families First Coronavirus Response Act (FFCRA) credit under certain conditions related to COVID-19. These include:

  1. For Self-Care:

    • If you are unable to work (including telework) due to government-imposed quarantine orders, self-quarantine, or experiencing COVID-19 symptoms while seeking a medical diagnosis.
    • The credit calculation: Multiply the number of days on leave by the lesser of your average daily self-employment income for the year or $511.

  2. For Caring for Family or Childcare:

    • If you are unable to work (or telework) because you need to care for a family member under quarantine or a child whose childcare is unavailable.
    • The credit calculation: Multiply the number of days on leave by the lesser of ⅔ of your average daily self-employment income or $200.

How do we determine your average daily self-employment income?

We use line 6 of the Schedule SE from your personal tax return to determine your annual pay. This figure is then divided by 260, the standard number of working days in a year, to calculate your daily rate.

Depending on the reason for your leave, different rates apply for the claimed dates:

  • For self-leave: We claim your full daily rate, up to a maximum of $511 per day.
  • For family or childcare leave: The calculation is based on 2/3rds of your daily pay, up to a maximum of $200 per day.
 
 
 

What are the requirements to qualify for FFCRA credits?

To be eligible for the Families First Coronavirus Response Act (FFCRA) credits, it is essential that your work absence was directly due to COVID-19 related reasons. Here are the specific circumstances under which you may qualify:

  1. Quarantine or Isolation Order: If a government agency required you to follow a quarantine or isolation order.

  2. Self-Quarantine Recommendation: If a healthcare provider advised you to self-quarantine.

  3. COVID-19 Symptoms and Seeking Diagnosis: If you experienced symptoms of COVID-19 and were awaiting a medical appointment for diagnosis.

  4. Awaiting Test Results: If you were absent from work while waiting for the results of a COVID-19 test.

  5. COVID-19 Vaccination: If you were receiving a COVID-19 vaccine.

  6. Vaccine-Related Side Effects: If you were dealing with side effects following your COVID-19 vaccination.

  7. Childcare Due to School or Daycare Closures: If you needed to care for your children because their school or daycare was closed due to COVID-19.

  8. Caring for Others with COVID-19: If you were caring for someone else or family members who were dealing with COVID-19 related issues.

These criteria are designed to ensure that those who were genuinely impacted by COVID-19 related circumstances can receive the support they need through FFCRA credits.

Who is considered a self-employed person according to the Internal Revenue Service (IRS)?

In the context of the United States, the Internal Revenue Service (IRS) categorizes you as a self-employed individual if any of the following conditions apply to you:

  1. Sole Proprietor or Independent Contractor: You are engaged in a trade or business where you operate as a sole proprietor or work as an independent contractor.

  2. Partnership Member: You are part of a partnership involved in conducting a trade or business.

  3. Business Owner: You run your own business, which could include various forms such as a part-time business or working as a gig worker.

These criteria aim to encompass a broad range of self-employment activities, acknowledging the diverse ways individuals engage in business activities.

 

How does the IRS define a dependent?

The Internal Revenue Service (IRS) defines a dependent as either a qualifying child or a qualifying relative of the taxpayer. This includes a wide array of familial relationships:

  • Direct relations like your child, stepchild, foster child, sibling, parent, grandparent, or grandchild.
  • Extended relations such as your aunt, uncle, niece, nephew, as well as various in-law relationships (e.g., son-in-law, daughter-in-law, mother-in-law, father-in-law, brother-in-law, sister-in-law).

What is the Child Tax Credit and how is it related to dependents?

The Child Tax Credit is designed to provide a tax break to families with qualifying children. To claim this credit or a credit for other dependents, you would need to have filed a Schedule 8821 with your tax return.

What are the criteria for a child to qualify as a dependent?

  • The child must have lived with you for more than half of the tax year. Note that temporary absences for reasons like education or medical care still count as living with you.
  • You must have provided more than half of the child’s total support during the tax year.
  • The child’s gross income must be below a certain threshold, which is determined annually by the IRS.

Important Considerations:

Keep in mind that these are general guidelines. The IRS has detailed rules and potential exceptions that might apply in specific situations. For comprehensive information, refer to IRS publications such as IRS Publication 501.

Examples of Who Can Be a Dependent:

  • Child, Parent
  • Sibling (Brother/Sister)
  • Stepparent, Stepchild
  • Adoptive Daughter, Adoptive Son
  • Stepbrother, Stepsister
  • Half Brother, Half Sister
  • Grandparent, Grandchild
  • In-law relationships (Son-in-law, Daughter-in-law, Mother-in-law, Father-in-law, Brother-in-law, Sister-in-law)
  • Uncle, Aunt
  • Niece, Nephew

How long does it take for the IRS to process and distribute returns to self-employed individuals?

When you file your return, the IRS typically takes about 4 to 5 weeks to acknowledge its receipt. After acknowledgment, the distribution of the return to self-employed individuals generally occurs within a timeframe of 16 to 20 weeks. Please note that these timeframes are estimates and can vary based on specific circumstances and IRS workload.

What is the maximum FFCRA Tax Credit I can receive, and how is it calculated?

The total Families First Coronavirus Response Act (FFCRA) Tax Credit you can claim as a self-employed individual can be up to $32,200.00. This amount is determined based on your net earnings in the years 2020 and 2021.

To calculate your eligibility for the credit, you need to establish your daily average of self-employment income. This is calculated by dividing your net earnings for the taxable year by 260, which is the standard number of recognized working days in a year. This calculation helps the IRS to estimate the amount of wages you lost for each day you were unable to work due to COVID-19 related reasons.

Is it possible to claim FFCRA benefits for the same days that I received unemployment insurance payments?

No, you are not allowed to claim benefits under the Families First Coronavirus Response Act (FFCRA) for any days that you have already received payments from unemployment insurance. The system is designed to prevent the overlap or ‘double-dipping’ of benefits for the same period.

Am I eligible for FFCRA benefits if I haven’t paid into sick leave?

Yes, you are still eligible for the Families First Coronavirus Response Act (FFCRA) benefits even if you have not paid into sick leave. The FFCRA is specifically designed to address situations like this, recognizing that many entrepreneurs and self-employed individuals often do not have access to traditional sick leave benefits.

Does my eligibility for FFCRA benefits extend if my child’s school switches to online classes?

Yes, you are eligible for paid sick leave and expanded family and medical leave under the Families First Coronavirus Response Act (FFCRA) if the physical location where your child received instruction or care has closed, and this includes a shift to online classes. This applies even if your child is still expected or required to complete assignments at home. The closure of the physical facility is the key factor in determining eligibility for these benefits.

 

Where will my refunds for 2020 and 2021 be sent under the FFCRA?

For the tax years 2020 and 2021, any refunds you are eligible to receive under the Families First Coronavirus Response Act (FFCRA) will be directly sent to you by the IRS. These refunds will be issued in the form of a check and mailed to the address you provided on your FFCRA application.

Can I claim FFCRA tax credits if I have self-employment income in addition to a W2 salary?

Yes, you may still be eligible to claim FFCRA tax credits even if you have earned self-employment income alongside your W2 salary in 2020 and/or 2021. However, there are important considerations to keep in mind:

  1. If You Are a W2 Employee: If your employer has already claimed FFCRA credits on your behalf, this could affect your eligibility to claim additional credits as a self-employed individual.

  2. Impact of Paid Leave Benefits: If you receive paid leave benefits through your employment, this can impact the amount of tax credit available to you under the FFCRA for your self-employment income.

  3. No Double Benefits: It is crucial to understand that claiming the same benefit for the same period under both your employee and self-employed status is not allowed.

  4. Opportunities for Additional Credits: In cases where your benefits as an employee do not fully cover your needs, you may have the opportunity to claim additional credits based on your self-employment income.

It’s important to assess your individual situation carefully to understand how your combined employment and self-employment status affect your eligibility for FFCRA tax credits.

Why is it necessary to have positive earnings to qualify for the FFCRA credit?

During the COVID-19 pandemic, we recognize that individuals across the globe were affected in various ways. To qualify for the Families First Coronavirus Response Act (FFCRA) credit, showing positive earnings is typically required as it indicates the loss of income due to COVID-19 related circumstances. However, we understand that many individuals may not have had positive earnings in 2020 due to the pandemic’s restrictions. In such cases, we can consider your net income from 2019 to establish eligibility for the credit. This approach ensures that those significantly impacted by the pandemic still have access to the necessary financial support.

 
 
 

Is it permissible for more than one parent or guardian in a household to claim the FFCRA credit?

Yes, it is possible for more than one parent or guardian within the same household to claim the Families First Coronavirus Response Act (FFCRA) credit. However, it is important to note that the same dates cannot be claimed by more than one parent or guardian. Each individual must claim for distinct periods to ensure compliance with the regulations of the FFCRA.

Is the FFCRA considered a loan or a grant, and do I need to repay it?

The Families First Coronavirus Response Act (FFCRA) is a tax credit, not a loan. Therefore, it does not require repayment. Additionally, it is distinct from a grant. The FFCRA essentially provides a refund of taxes that you have already paid, functioning as a credit against your tax liabilities.

How are your fees structured for securing my FFCRA tax refund?

Our fee system is entirely performance-based, ensuring that our interests align with your successful refund claim. We do not charge our “Success Fee” unless we successfully secure your refund from the IRS.

Once you receive your IRS checks, our typical charge is a fee of 15% of the total refund amount we have helped you claim. To initiate the process, we ask our clients for a $500 deposit after the completion of their returns. This deposit is then credited against the total invoice amount when the refund is issued. Our goal is to make this process as fair and transparent as possible, ensuring that you see value in our services.

This is a very good question. Our team has been in the business finance arena for almost 30 years. We assembled a group of dedicated business finance professionals that include accountants, tax lawyers, business funding specialists, business lenders and equity finance experts. Our dedication to our clients is paramount. 

Our hours

9:00 AM – 5:00 PM Eastern
Monday – Friday

Contact us

Email: help@ertcautomatic.com 

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