Found a reference here : https://www.hrblock.com/tax-center/filing/credits/earned-income-credit/
Good news for your 2020 and 2021 tax returns
A special “lookback” rule in the Dec. 2020 stimulus bill lets taxpayers claim this valuable credit – even if your income was higher in 2020 and 2021.
If your 2019 earned income is higher than your 2020 earned income, and results in a higher credit, the lookback allows you to use 2019 earned income to calculate the 2020 earned income credit.
Taxpayers can use their 2019 earned income to calculate their credit for tax year 2021 if your earned income in 2021 is less than it was in 2019 and using the lookback results in a higher credit. This bears no effect on your calculation of gross income. The IRS will have math error authority to correct an error if one is made under this section.
If you qualify for this tax credit, you can reduce your taxes and increase your tax refund. The credit ranges from a few hundred to thousands of dollars depending on your tax filing status and quantity of qualifying children.
But it can be difficult to understand the rules surrounding this underutilized tax credit, which is why some people shy away from this credit. Read on to learn more about what it is, why it’s beneficial, and how to qualify for the Earned Income Credit.
