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Managing SETC Tax Credit Limitations and Restrictions

Despite the significant benefits of the SETC Tax Credit, it is crucial to understand its limitations and restrictions.
As an illustration, claiming the SETC Tax Credit can increase your adjusted gross income, potentially affecting your eligibility for other tax credits and deductions.

The good news is, the SETC Tax Credit is not considered taxable income, ensuring no additional tax liability will arise from the credit itself.

Nonetheless, there are some restrictions to consider.
You cannot claim the full SETC amount if you were paid wages for sick or family leave by an employer, or unemployment benefits throughout 2020 or 2021.

Also, if you did not file your initial tax return but want to claim or adjust SETC credits, you can do so by filing an amended return within the specified deadlines set for the 2020 and 2021 tax returns.