This question is there due to tax-related disaster relief that many taxpayers are eligible to claim.
When you first see the question asking whether your earned income for 2017 was less than your earned income for 2016, you can answer either “yes” or “no”:
- Answering “yes” will show you some additional information regarding disaster relief. If you meet the qualifications for the disaster relief, then answer “yes”. If you do not meet the qualifications for disaster relief, then answer “no” and your Earned Income Tax Credit (EITC) will be calculated based on your 2017 earned income.
- Answering “no” will simply skip the additional disaster relief question and your EITC will be calculated based on your 2017 earned income.
If you do qualify for the disaster relief and you choose to use your 2016 earned income to calculate your EITC, be aware that it may or may not result in a higher refund than using your 2017 earned income. You can choose to use the income that gives you the higher amount.