It is asking me if i want to recalculate my child tax credit from 2019 should I do that it is also saying that about my EIC

[xmasbaby0]

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.

[DawnC]

It depends.  If using your 2019 income gives you a bigger credit, then you should use it.   If it doesn't give you a bigger credit, then don't use it and use 2020 instead.    If you select yes. TurboTax will tell you what the credit would be and if it is not more, then you can tell TurboTax - no thanks, I will use my 2020 income.  

The IRS is giving taxpayers the option of using the 2019 income amounts if it will help them qualify for larger credits.   But, this is not a requirement; it is optional.