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What is the SETC Tax Credit? The SETC, meaning “Self-Employed Tax Credit”, is a specific tax credit created to provide financial relief to self-employed individuals who were adversely impacted by the COVID-19 pandemic. This credit was implemented 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. One 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. setc tax credit reduces their tax burden on a dollar-for-dollar basis, possibly leading to a significant increase in their tax refund. The SETC tax credit is intended to give self-employed individuals financial support similar to the paid sick and family leave benefits typically offered to employees. By providing this credit, the government understands the unique challenges faced by the self-employed sector during the pandemic and aims to mitigate income disruptions and ensure greater financial stability for these professionals.