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joyride23
New Member

I have read that the gov't changed things so that UC is not being used as earned income, therefore won't lower the EIC and child tax credits. Mine is, HELP!

My AGI is factoring in my UC and it's disqualifying me from the EIC and more Child tax Credit, please help, what do I do??
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2 Replies

I have read that the gov't changed things so that UC is not being used as earned income, therefore won't lower the EIC and child tax credits. Mine is, HELP!

Many people had lower incomes during the pandemic in 2020 due to reduced work hours, layoffs, etc.  Or they received unemployment benefits.   These factors affect how much earned income credit and additional child tax credit you can get on your 2020 tax return and affect your 2020 refund.

 

There is a “lookback” option that allows you to use your 2019 amounts for earned income credit or child tax credit.   You can choose whether to use your 2019 amount or your 2020 amount.  Choose whichever amount gives you a better tax refund for your 2020 refund.

 

You can see this and choose in the earned income credit section  in Deductions and Credits. 

 

You still MUST enter all of your 2020 income into your 2020 tax return, including any unemployment you received.

 

Please follow these steps in TurboTax:

  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.
**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
DawnC
Expert Alumni

I have read that the gov't changed things so that UC is not being used as earned income, therefore won't lower the EIC and child tax credits. Mine is, HELP!

You need to have more than $2500 in earned income to claim the Additional Child Credit, so if you did not work at all in 2020, use your 2019 earned income.   Unfortunately, the EIC factors in both AGI and earned income and you can only use the lookback for the earned income part.   TurboTax will still use your 2020 AGI as part of the EIC calculation.    And unemployment counts in your 2020 AGI.   So, if you had a significant amount of unemployment, it could adversely affect the amount of your EIC credit.    

 

 

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