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Navigating SETC Limitations and Restrictions
Despite the significant benefits of the SETC Tax Credit, it is crucial to understand its limitations and restrictions.
For example, claiming the SETC may increase your adjusted gross income, possibly influencing your eligibility for other deductions and tax credits.
However, the SETC Tax Credit is not considered taxable income, so no extra tax liability will be generated by the credit.
That said, there are some restrictions to keep in mind.
You cannot claim the full SETC amount if you have received wages for sick or family leave from an employer, or unemployment benefits in 2020 or 2021.
Additionally, 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.
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