IRS Warns Taxpayers About Misleading Claims of Non-Existent "Self Employment Tax Credit"
The IRS has issued a consumer alert about false information circulating on social media regarding a non-existent "Self Employment Tax Credit." Promoters claim this credit can provide substantial payments to self-employed individuals and gig workers for the COVID-19 pandemic period, similar to misleading claims about the Employee Retention Credit. However, the actual credit being misrepresented is the Credits for Sick Leave and Family Leave, which have strict eligibility criteria and are not widely applicable.
IRS Commissioner Danny Werfel cautions taxpayers against being deceived by such claims and advises consulting with trusted tax professionals. The Sick and Family Leave Credits are only applicable for certain COVID-19 related situations in 2020 and 2021, and misusing Form 7202 for these credits can result in penalties.
The IRS has noted an increase in incorrect claims and stresses the importance of accurate tax filings. The agency also warns against other scams, such as those involving the Fuel Tax Credit and household employment taxes. Taxpayers are urged to avoid falling for these scams and to seek reliable tax advice.