The IRS has recently issued a warning about misleading claims circulating on social media regarding a non-existent “Self Employment Tax Credit.” These false claims are causing many self-employed individuals and gig workers to file incorrect tax returns.
Promoters are falsely advertising the “Self Employment Tax Credit” as a way to receive large payments for the COVID-19 period, similar to misinformation around the Employee Retention Credit. In reality, the so-called credit doesn’t exist. Instead, the underlying credit being referred to is the Credits for Sick Leave and Family Leave, which is much more limited and technical.
Key Points to Know:
Limited Eligibility: The Sick and Family Leave Credits are only available for specific COVID-19 related circumstances in 2020 and 2021. Many people do not qualify for these credits.
Misleading Claims: The IRS has seen many taxpayers incorrectly using Form 7202 to claim this credit based on income earned as an employee, not as a self-employed individual.
Consult a Professional: Before acting on any tax advice seen on social media, it’s crucial to consult a trusted tax professional to ensure you meet the eligibility requirements and avoid filing incorrect claims.
IRS Commissioner Danny Werfel advises, “Don’t be misled by outlandish claims on social media. Always consult a trusted tax professional before paying someone to file these claims”.
Avoid falling for these scams, which include misinformation about other credits like the Fuel Tax Credit. Protect yourself by verifying your eligibility with a professional and ensuring your tax return is accurate before filing.
Stay informed and safeguard your financial health by relying on credible sources and professional advice. If you need help, contact Patrick Vince at Unifirst Financial & Tax Consultants.
Source: IRS Newsroom
