Advice making the rounds on social media touting a “self-employment tax credit” as a way for self-employed and gig workers to receive big payments for the COVID-19 pandemic period is a new problem the IRS is dealing with because no such tax credit exists.
In a consumer alert issued on Monday, the IRS said bad advice circulating on social media about the non-existent “self-employment tax credit” is misleading taxpayers into filing false claims.
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 don’t.
In reality, the IRS said, the underlying credit being referred to on social media isn’t called the “self-employment tax credit” but a much more limited and technical tax credit for sick leave and family leave. Many people usually don’t qualify for these credits, and the IRS stated it’s closely reviewing claims coming in under this tax code provision.
“This is another misleading social media claim that’s fooling well-meaning taxpayers into thinking they’re due a big payday,” IRS Commissioner Danny Werfel said in a statement on July 15. “People shouldn’t be misled by outlandish claims they see on social media. Before paying someone to file these claims, taxpayers should consult with a trusted tax professional to see if they meet the very limited eligibility…
