Recently, a scam has been spreading around the internet, and it could spell trouble for small business owners. 

Courtney Kincaid, the President and CEO of the Indiana CPA Society, says social media posts about the self-employment tax credit can lead business owners to file false claims. 

The IRS released a statement about the scam: “Promoters and social media are marketing something they describe as the “Self Employment Tax Credit” as a way for self-employed people and gig workers to get big payments for the COVID-19 pandemic. 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 do not.” 

The IRS advises, “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.”

Kincaid says if something sounds too good to be true, it most likely is. While taking advantage of this COVID-era tax credit may seem enticing, it can lead to big fines from the IRS. “If you break the rules, you’re going to face a penalty.” 

Kincaid said when in doubt, it is always best to contact your CPA and visit the IRS newsroom for updates.