What is the SETC Tax Credit?
Understanding SETC Limitations and Restrictions
Understanding the limitations and restrictions of the SETC Tax Credit is vital, even with its substantial advantages.
For example, claiming the SETC may increase your adjusted gross income, possibly influencing your eligibility for other deductions and tax credits.
On the bright side, the SETC is not treated as taxable income, so no extra tax liability will be generated by the credit.
That said, there are some restrictions to consider.
The entire SETC amount is not claimable if you received wages for sick or family leave from your employer, or unemployment benefits in 2020 or 2021.
Additionally, if you missed the initial tax return filing but wish to claim or adjust SETC credits, you can do so by submitting an amended return within the deadlines specified for the 2020 and 2021 tax returns.