topic My income for 2020 was $1991, i used 2019 income again bc turbotax told me to, my agi became $10,413. My refund is $6266 fed, $591 state and was accepted. Is this right? in Retirement tax questions

My income for 2020 was $1991, i used 2019 income again bc turbotax told me to, my agi became $10,413. My refund is $6266 fed, $591 state and was accepted. Is this right?

hannahjoyy1997 — Sun, 21 Mar 2021 23:23:06 GMT

The irs put a hold due to my eitc. They said double check any errors. Ive never used income twice so im not sure if i did this right, i just filed using the prompts of turbo tax. Did i do this right? It asked if i wanted to use 2019 income again to get a bigger refund since i only made $1,991 in 2020. So then it asked for my w2 info for the jobs i worked in 2019 and i added these w2's to the 2020 return. Both federal and state were accepted. But i got a letter in the mail saying irs is going to double check and can take up to 60 days.

Re: My income for 2020 was $1991, i used 2019 income again bc turbotax told me to, my agi became $10,413. My refund is $6266 fed, $591 state and was accepted. Is this right?

SweetieJean — Mon, 22 Mar 2021 00:26:23 GMT

The EITC is calculated two ways: (1) based on earned income, and (2) based on AGI. Your AGI is not on your W-2, and is calculated from all of your income, not just wages. You then get the lower of the two amounts.

Earned Income and Earned Income Tax Credit (EITC) Tables | Internal Revenue Service (irs.gov)

So then it asked for my w2 info for the jobs i worked in 2019 and i added these w2's to the 2020 return

Well, that was the wrong thing to do, and is why the IRS flagged you. Did you not file a 2019 tax return? Are you saying your TOTAL income for 2020 was only $1,991? Also, your screen name suggest that you were born in 1997. If so, be aware that you are only eligible for EIC under age 25 if you have a qualifying dependent. Further, you do not qualify if you are eligible to be a dependent yourself.

All you can do now is wait to hear back from the IRS. But it sounds like you misunderstood TT's questions and directions.

Re: My income for 2020 was $1991, i used 2019 income again bc turbotax told me to, my agi became ...

DavidD66 — Mon, 22 Mar 2021 00:27:45 GMT

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 their 2019 earned income if it was higher than their 2020 earned income in calculating the Additional Child Tax Credit (ACTC) as well as the Earned Income Tax Credit (EITC).

When to Use Schedule EIC: Earned Income Credit

I can't tell you if you prepared your return correctly without being able to see it, but if you followed the TurboTax step-by-step it should be correct. The IRS always securitizes certain credits, like the EITC. With the changes for 2020 they are reviewing affected tax returns very carefully.

The fact that the IRS is reviewing your return does not mean there is a problem with it. It will however, delay receipt of your refund.

Re: My income for 2020 was $1991, i used 2019 income again bc turbotax told me to, my agi became ...

hannahjoyy1997 — Mon, 22 Mar 2021 20:45:00 GMT

I do have a child who is my dependent. I made $1,991 in 2020. It asked if i wanted to use 2019s income since it was higher than 2020 instead so i said yes. It asked me for the w2s from 2019 so i input those. It increased my eitc to $3545 by using the 2019 income and 2020 plus my dependent. I already claimed 2019 and got the return for that income last year. So im kit sure how I'm able to claim it again but i just followed the prompts from turbo tax. Someone else said this was not the right thing to do... Im just hoping it was right bc i really need this money to pay off debt.

Re: My income for 2020 was $1991, i used 2019 income again bc turbotax told me to, my agi became ...

ThomasM125 — Thu, 25 Mar 2021 00:00:37 GMT

@hannahjoyy1997 It looks like you did everything correctly. At your income level, your earned income credit (EIC) increases as your income increases. So, you get a bigger credit by using 2019's income to figure your 2020 EIC, which you are allowed to do because of special regulations this year.