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What is setc tax credit ? The SETC, short for “Self-Employed Tax Credit”, is a specific tax credit intended to offer financial relief to self-employed individuals who were negatively affected by the COVID-19 pandemic. This credit was introduced as part of the Families First Coronavirus Response Act (FFCRA) to support sole proprietors, independent contractors, gig workers, and other self-employed professionals facing economic challenges due to the pandemic. officialsetcrefund of the key features of the SETC tax credit is that it is a refundable credit, not a loan. This means that qualified self-employed individuals can obtain the credit as a refund, even if they have no tax liability. The credit effectively reduces their tax burden on a dollar-for-dollar basis, possibly leading to a significant increase in their tax refund. The SETC tax credit aims to provide self-employed workers financial support comparable to the paid sick and family leave benefits typically offered to employees. By offering this credit, the government understands the unique challenges faced by the self-employed sector during the pandemic and aims to mitigate income disruptions and support greater financial stability for these professionals.