CatinaT1
Expert Alumni

Deductions & credits

When you look at your return, if you used the prior year earned income you will see "PYEI" and the amount of your 2019 earned income on the dotted line next to line 27 on your Form 1040.

 

Unemployment is not earned income, it is unearned income and not used in calculating your earned income tax credit.  This provision allows for use of your 2019 earned income if it is higher than your 2020 earned income.  This is something you must elect, it is not automatic.

 

If you did not take advantage of this benefit when you originally filed your return, you can amend to make the adjustment.

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