The IRS has issued an alert about bad advice circulating on social media about a non-existent “Self Employment Tax Credit.” This scam has led some taxpayers to file false claims.

Promoters are saying that self-employed people and gig workers can file for this so-called credit in order to get big payments for the COVID-19 pandemic period. “In reality, the underlying credit being referred to ... is a much more limited and technical credit called Credits for Sick Leave and Family Leave,” the IRS stated. “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.

“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. “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.”

The IRS explained that people who were self-employed can claim Credits for Sick and Family Leave only for limited COVID-19 related circumstances in 2020 and 2021; the credit is not available for 2023 tax returns. It reported that taxpayers are repeatedly and incorrectly using Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals, to claim a credit based on income earned as an employee and not as a self-employed individual.

The IRS has a detailed set of FAQs describing the very technical requirements for qualifying for this credit.

The IRS noted that it is seeing some similarities to marketing around this scam credit to the aggressive promotion of the Employee Retention Credit. “Both are technical credits that have been mischaracterized by some as a way for average taxpayers to get a big government payment. In reality, these are very limited credits that have a variety of complex requirements before people can qualify.”

The IRS urges people to check with a trusted tax professional before filing for any “Self Employment Tax Credit” or any other questionable tax claim circulating on social media.