The SETC is the common name used to describe the Paid Sick and Family Leave credits that were made available to self-employed individuals under Sections 9642 and 9643 of the American Rescue Plan Act, March 11, 2021. Many who claimed income in 2021 on a “Schedule C” or in a Partnership (1065) can qualify. This includes sole proprietors, 1099 contractors, owners of an LLC, and owners in a partnership.
Generally, eligibility can be triggered by having Covid, symptoms of Covid or quarantine, caring for a family member, or a child whose daycare or school was closed.
The amount is based on income and the number of days the individual was affected. The maximum is $32,220, and the average is about $10,000.
It is claimed by amending the 2021 tax return.
The amount of tax legislation in 2020 and 2021 was overwhelming, and there was no public awareness campaign for these credits. As a result, it’s received very little attention. In addition, there are several forms, a required calculation, and an attestation that needs to be created. It is not as simple as claiming a business expense or a child tax credit. Aside from creating technology to assist with the preparation of this filing, it can be very cumbersome, and easy to create an error, which causes the IRS to reject it.
We selected Anchor Accounting Services in Midlothian, VA, close to Richmond, for its longstanding reputation as a top-notch accounting firm and its user-friendly technology. With a 12-year track record of excellence, Anchor specializes in serving self-employed taxpayers. Ryan Leggett, the owner and CEO, is highly regarded for his integrity, both professionally and personally. Recently, he was invited as a keynote speaker at a June 2024 conference in Washington D.C. hosted by the Office of the Comptroller of the Currency.
As recommended by the IRS for any tax filing, it’s vital to use qualified tax professionals. Anchor Accounting Services disqualifies over 30% of SETC applications for not meeting the IRS guidelines. IRS.gov provides answers to common questions, all of which is followed in the Anchor Accounting SETC service.
As in all government programs, there are always bad actors. OneBridge Advisors acts as a safeguard by doing the due diligence to identify tax professionals and accounting firms who operate within IRS guidelines and ensure their work.
Clients are welcome to have their own tax professional review the filing before signing. As mentioned previously, “SETC” is a nickname given to the Paid Sick and Family Leave tax credits, similar to Research credits being commonly known as R&D or Research & Development tax credits. To make it easy for you and your tax professional to read both the law and the IRS guidance, we have provided the appropriate links above.
OneBridge™ Advisors is independent of Jorns & Associates and is not an accounting firm. It is owned and operated by third-party associates. OneBridge™ Advisors connects people to tax accounting service providers, and there is no charge to be connected with a tax advisor. OneBridge™ Advisors is not herein engaged in rendering legal, accounting, or tax preparation services. The information on this website is provided with the understanding that you are under no obligation to retain any services of those linked through our website. The case studies included are for example purposes only and do not guarantee results.
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