The Internal Revenue Service warned Monday about bad advice that's being peddled on social media promoting a bogus "Self Employment Tax Credit" and prompting unsuspecting taxpayers to file false claims for the credit.
The promoters claim the credit is available to self-employed people and gig workers and suggest they may be eligible for up to $32,000 in payments.
The IRS said the actual tax credit is a far more limited and technical credit called Credits for Sick Leave and Family Leave. But many people don't 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.
The IRS compared the social media push to promotion of the Employee Retention Credit, which has prompted
"This is another misleading social media claim that's fooling well-meaning taxpayers into thinking they're due a big payday," said IRS Commissioner Danny Werfel in a statement Wednesday. "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 scenarios."
People who were self-employed are able to legitimately claim Credits for Sick and Family Leave only for limited COVID-19 related circumstances in 2020 and 2021, the IRS pointed out. But the credit isn't available for 2023 tax returns. Nevertheless, the IRS has been seeing repeated examples where taxpayers are incorrectly using
To qualify for the Sick and Family Leave Credits, self-employed workers need to have different technical reasons in 2020 and 2021 why they couldn't work, including caring for an individual who was subject to a quarantine or isolation order. The IRS has posted a set of
