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2021 lookback rule

The IRS is just overwhelmed with work to do and short staffed so all you can do is wait for the original return to be processed  and then recalculated.  You may get the refund in 2 pieces ... the original refund and the correction.  Check the IRS site once a week until you see progress ... you can only track the original return.   :   https://www.irs.gov/refunds

CArias
Returning Member

2021 lookback rule

No, I think it’s zero. 

2021 lookback rule

We received our tax refund but not the unemployment tax refund. We paid taxes on unemployment while receiving UC. We used look back rule too.  Was wondering the same thing. 

2021 lookback rule


@CArias wrote:

No, I think it’s zero. 


If you have no tax liability on your original tax return, then you are not eligible for any further tax refund based on your unemployment compensation.

2021 lookback rule


@SAM1301 wrote:

We received our tax refund but not the unemployment tax refund. We paid taxes on unemployment while receiving UC. We used look back rule too.  Was wondering the same thing. 


Is there an amount on your Form 1040 Line 24?

CArias
Returning Member

2021 lookback rule

Ok, but then why does tax software give me back $11k, and my original return I got back $6500? I filed before the law passed and received my refund before the law passed. 

2021 lookback rule

Can you use the look back rule if you made more in 2021?  To get a bigger eic?  

MaryK4
Expert Alumni

2021 lookback rule

Yes- for tax year 2021, you can choose to look back two years and use 2019 earned income instead of 2021 earned income for purposes of calculating the earned income credit. This is optional and can be used if the 2019 earnings will increase the amount of credit that can be claimed.

@aventaylor

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2021 lookback rule


@aventaylor wrote:

Can you use the look back rule if you made more in 2021?  To get a bigger eic?  


No ... it only applies if you made LESS in 2021.  

2021 lookback rule

Ok but the person below said you cannot so which one do I go by?

2021 lookback rule

Just follow the screen instructions and let the program do the math ...

 

A special “lookback” rule in the Dec. 2020 stimulus bill lets taxpayers claim this valuable credit – even if your income was higher in 2020 and 2021.

 

If your 2019 earned income is higher than your 2020 earned income, and results in a higher credit, the lookback allows you to use 2019 earned income to calculate the 2020 earned income credit.

 

Taxpayers can use their 2019 earned income to calculate their credit for tax year 2021 if your earned income in 2021 is less than it was in 2019 and using the lookback results in a higher credit. This bears no effect on your calculation of gross income. The IRS will have math error authority to correct an error if one is made under this section.  

 

2021 lookback rule

@Critter-3  So you can use it for 2021 also?  I looked all over the IRS for it.  You got a link?  Didn't know they extended it to 2021.  

2021 lookback rule


@VolvoGirl wrote:

So you can use it for 2021 also?  I looked all over the IRS for it.  You got a link?  Didn't know they extended it to 2021.  


 

Yes, it was extended to 2021.  Look at the "Tip" on page 38 of the 1040 Instructions.

https://www.irs.gov/pub/irs-pdf/i1040gi.pdf#page=38

 

tdgarza23
New Member

2021 lookback rule

I agree i use my 2019 because I made way lower amount but it said I didnt qualify, Im like how in the world i dont qualify if im just using that income. It I wouldve used 2019 income I would've received higher credit than this past year due to my unemployment

KrisD15
Employee Tax Expert

2021 lookback rule

 

You may only use the "lookback" for the Earned Income Credit if your 2019 Tax Year income was HIGHER.

 

According to the IRS:

 

“You may elect to use your 2019 earned income to figure your EIC if your 2019 earned income is more than your 2021 earned income.”

 

 

IRS LINK

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