Deductions & credits
Turbotax does not make the decision to file using the Lookback rule for you. You must make that decision within the software. If you have already transmitted your tax return to the IRS, then you will need to Amend the 2020 to do take advantage of the LookBack rule for the Earned Income Credit.
If you're referring to the IRS Taxpayer Certainty and Disaster Tax Relief Act of 2020 EIC special look back provision, see the steps below.
- Type EIC in the search and select the Jump to.
- Continue with the onscreen interview until you get to the Do you want to use last year's earned income? screen.
- Continue with the onscreen interview until complete.
Per IRS: If your earned income was higher in 2019 than in 2020, you can use the 2019 amount to figure your EITC for 2020. This temporary relief is provided through the Taxpayer Certainty and Disaster Tax Relief Act of 2020.
Note: If you earned income was higher in 2020 versus 2019, you won't be able to use the EIC special look back.
Special Lookback for Earned Income Tax Credit and the Child Tax Credit
This is a very important provision which has the potential to help workers who experienced lower income in 2020, or received unemployment income in lieu of their regular wages, get bigger tax credits and larger refunds in the coming year.
The special lookback rule will allow lower income individuals to use their earned income from 2019 to determine their Earned Income Tax Credit and the refundable portion of the Child Tax Credit in 2020, since their lower 2020 income could reduce the amount they are eligible for.
The Earned Income Tax Credit is the country’s largest program for working people with low to moderate income. More than 25 million eligible tax filers received federal Earned Income Tax Credit last tax season and the average Earned Income Tax Credit was $2,476 per filer.
