Deductions & credits

It would be hard to know without seeing the details on your tax return.  Are you aware that the Consolidated Appropriations Act (CAA) was signed into law on December 27, 2020 as a stimulus measure to provide relief to those affected by the pandemic?  For tax year 2020, the CAA allows taxpayers to use either their 2020 or 2019 earned income in calculating the Additional Child Tax Credit (ACTC) as well as the Earned Income Tax Credit (EITC).

If you have e-filed your 2020 Federal tax return and the tax return is accepted by the IRS, you will have to amend your 2020 Federal tax return and correct the entries and calculations to receive the Earned Income Tax Credit.

If you have e-filed your 2020 Federal tax return and the tax return is rejected by the IRS, you will have to amend your 2020 Federal tax return and correct the entries and calculations to receive the Earned Income Tax Credit as well as correct the entries that generated the rejection.

To qualify for the Earned Income Tax Credit, you must have earned income.  The IRS defines earned income as: 

• Taxable income you earned as an employee, such as wages, salaries, commissions, and tips,
• Profits from operating your business or farm,
• Long-term disability pay if received before the minimum retirement age,
• Union strike benefits. 

Here are all of the requirements to qualify for the Earned Income Credit: 

• Have earned income; and
• Have been a U.S. citizen or resident alien for the entire tax year; and
• Have a valid Social Security number (not an ITIN) for yourself, your spouse (if filing jointly), and any qualifying children on your return; and
• Not have investment income exceeding $3,650; and
• Not be filing a Form 2555 or 2555-EZ; and
• File a return with the Single, Married Filing Jointly, Head of Household, or Qualifying Widower filing status, even if you're not required to file a return. 

In addition, both your earned income and Adjusted Gross Income (AGI) may not exceed: 

• $15,820 if you're not claiming a qualifying child ($21,710 if filing jointly);
• $41,756 if you're claiming 1 qualifying child ($47,646 if filing jointly);
• $47,440 if you're claiming 2 qualifying children ($53,330 if filing jointly);
• $50,954 if you're claiming 3+ qualifying children ($56,844 if filing jointly). 

The tests for a qualifying child are:

• Relationship: Must be your child, adopted child, foster child, brother or sister, or a descendant of one of these (grand or nephew).
• Residence: Must have the same residence for more than half the year.
• Age: Must be under age 19 or under 24 and a full-time student for at least 5 months. They can be any age if they are totally and permanently disabled.
• Support: Must not have provided more than half of their own support during the year.
• Joint Support: The child cannot file a joint return for the year.

One more thing — if you are not claiming a qualifying child: 

• You (or your jointly filing spouse) must have been born on or after January 1, 1956; and
• You (or your jointly filing spouse) must have been born on or before December 31, 1995; and
• You (and your jointly filing spouse) cannot be claimed as a qualifying child or dependent on anyone else's return.

TurboTax software will ask you simple questions and give you the tax deductions and credits you are eligible for based upon your answers.

See also this TurboTax Help.