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posted Feb 13, 2021 11:53:07 AM

EITC - new law for 2020

According to the Taxpayer Certainty and Disaster Tax Relief Act of 2020 in December, it states that the Act allows taxpayers to report earnings from either 2019 or 2020; whichever year that provides the highest tax credit. The wife did not have any earned income at all for 2019 so she didn't even file a return.

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1 Replies
Expert Alumni
Feb 13, 2021 12:11:37 PM

Yes, you can use your 2019 earned income instead of your 2020 income to compute the Earned Income Tax Credit if your 2019 earned income was more than your 2020 earned income. 

 

If your 2019 earned income was lower than your 2020 earned income because your wife did not work then you will have to use your 2020 earned income.

 

 

 Please see What are the qualifications for the Earned Income Credit (EIC or EITC)?

 

Please follow these steps in TurboTax to use 2019 earned income:

  1. Login to your TurboTax Account 
  2. Click on the Search box on the top and type "EIC"
  3. Click on “Jump to EIC”
  4. Answer the questions until you reach the screen "Do you want to use last year’s earned income?"
  5. Note your current refund amount using your 2020 earned income at the top of the screen.
  6. Click "Yes", enter your "2019 Earned Income" if the field is blank and click "continue".
  7. Compare the new refund amount using your 2019 earned income with the previously noted refund amount using your 2020 earned income.
  8. If your new refund amount is lower click "back" and then select "No" for the "Do you want to use your 2019 income to calculate this credit instead?" question.