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What is the SETC Tax Credit? The SETC, short for “Self-Employed Tax Credit”, is a specific tax credit intended to provide financial relief to self-employed individuals who were harmed by the COVID-19 pandemic. learn more was brought in as part of the Families First Coronavirus Response Act (FFCRA) to support sole proprietors, independent contractors, gig workers, and other self-employed professionals dealing with 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 entitled self-employed people can get 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, likely leading to a significant increase in their tax refund. The SETC tax credit is intended to give self-employed people financial support comparable to the paid sick and family leave benefits typically offered to employees. By providing this credit, the government acknowledges the unique challenges faced by the self-employed sector during the pandemic and attempts to mitigate income disruptions and promote greater financial stability for these professionals.