Can tax credits be used to offset self-employment tax?

Tax credits are generally designed to reduce an individual's income tax liability rather than self-employment tax. The self-employment tax primarily covers Social Security and Medicare taxes for individuals who work for themselves and is calculated on net earnings from self-employment. Tax credits, such as those for education or child care, are applicable to income taxes but do not directly reduce the self-employment tax obligation. As a result, self-employed individuals cannot apply these tax credits to offset the self-employment tax. Understanding this distinction is crucial for tax planning and compliance.