I want to use my 2019 tax return to file for 2020 for the earned income credit on my two kids I didn't make anything for 2020 lost my job bc of covid can you help me?

[xmasbaby0 · Accepted solution]

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.

[12guillen]

Thank you. Are unemployment benefits included for determining the earned income #? I don't think so but please confirm. My 2020 earned income, excluding unemployment, is lower than 2019 and I want to use the 2019 # for the EIC calculation; however the software is using the 2020 # which is higher but only because of unemployment. Is that part of the calculation or is it an error in the software? Thank you.

[xmasbaby0]

Unemployment is added to your AGI but it does not count toward the earned income credit.   Unemployment is "unearned" income.

[12guillen]

Thank you. I selected the option to use my 2019 earned income for the 2020 EITC calculation but the online software is using my 2020 earned income + unemployment which is a higher total than my 2019 earned income. I know this rule is new because of the pandemic. Should the system being doing this or is this an error? How can I over-ride?

[npierson7]

Your unemployment benefits payments aren't part of your Earned Income and don't count for Earned Income Tax Credits. Also, the higher earned  income sometimes gives you a higher EITC. It all depends on your particular situation. Making the selection you are giving TurboTax a choice to  use your 2019 or 2020 Earned income for calculating your EITC and the software automatically will chose the one which gives you a bigger refund.  

[Bburgett326]

Unemployment does count to your AGI. It can decrease your Earned Income Credit. I have been reading and researching heavily on this. For some reason turbotax is not giving me the option to use my 2019 taxes. I am about to start over and try again. Why do I pay for this when i have to spend so much time to figure out how to do an extremely simple task. 

[JohnB5677]

Before you start over please try this procedure.

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.

I want to use my 2019 tax return to file for 2020 ... (intuit.com)

@Bburgett326