That’s right.
You can make this election if your 2019 earned income was greater than your 2020 earned income, since lower 2020 income could reduce the amount they are eligible for.
Please see Special Lookback for Earned Income Tax Credit and the Child Tax Credit in TurboTax's New Coronavirus Relief Package: What Does it Mean for You and a Second Stimulus Check blog for more information.
To use the lookback feature for the Earned Income Tax credit in TurboTax Online, go to the Earned Income tax credit section.
- In the Search box on the top right of your screen, enter earned income tax credit and click on Find at the right
- In the search result box, click on Jump to earned income tax credit
- In this section, follow the interview until you arrive at a page titled Do you want to use last year's earned income? Note down your Earned Income tax credit using your 2020 earned income.
- Click on the radio button Yes and enter your 2019 earned income and click Continue
- TurboTax will give you your new Earned Income tax credit using your 2019 earned income
- If the new credit is higher, click Continue to accept it
- If the new credit is lower, click Back to go back to the previous screen and click the radio button No then click Continue.
