IRS issues taxpayer warning

The IRS issued a consumer alert yesterday following bad advice circulating on social media about a non-existent “Self Employment Tax Credit” that's misleading taxpayers into filing false claims.

Promoters and social media are marketing something they describe as the “Self Employment Tax Credit” as a way for self-employed people and gig workers to get big payments for the COVID-19 pandemic period. Similar to misleading marketing around the Employee Retention Credit, there is inaccurate information suggesting many people qualify for the tax credit and payments of up to $32,000 when they actually do not.

In reality, the underlying credit being referred to in social media is not called the “Self Employment Tax Credit.” It is a much more limited and technical credit called “Credits for Sick Leave and Family Leave.” Many people simply do not qualify for this credit, and the IRS is closely reviewing claims coming in under this provision so people filing claims do so at their own risk.