Question regarding Earned Income Credit

[Francisco2019]

Hi everyone, I have a question about EITC. I'm not sure if I'm eligible. I'm a U.S Citizen. I made $14,063 through employment (Macy) in 2020. Then, lost job due Covid 19.I started collecting unemployment In New York City. Which I Claimed $24,423 in 2020. So am I eligible for EITC (Earned Income Tax Credit)?

[DawnC]

Not unless you have dependents that you claim on your tax return.  To qualify for and claim the Earned Income Credit you must:

• Have earned income; and
• Have been a U.S. citizen or resident alien for the entire tax year; and
• Have a valid Social Security number (not an ITIN) for yourself, your spouse (if filing jointly), and any qualifying children on your return; and
• Not have investment income exceeding $3,650; and
• Not be filing a Form 2555 or 2555-EZ; and
• File a return with the Single, Married Filing Jointly, Head of Household, or Qualifying Widower filing status, even if you're not required to file a return.

In addition, both your earned income and Adjusted Gross Income (AGI) may not exceed:

• $15,820 if you're not claiming a qualifying child ($21,710 if filing jointly);
• $41,756 if you're claiming 1 qualifying child ($47,646 if filing jointly);
• $47,440 if you're claiming 2 qualifying children ($53,330 if filing jointly);
• $50,954 if you're claiming 3+ qualifying children ($56,844 if filing jointly).

One more thing — if you're not claiming a qualifying child:

• You (or your jointly filing spouse) must have been born on or after January 1, 1956; and
• You (or your jointly filing spouse) must have been born on or before December 31, 1995; and
• You (and your jointly filing spouse) cannot be claimed as a qualifying child or dependent on anyone else's return.

Phew! Got all that? Fortunately, TurboTax handles the behind-the-scenes calculations so you don't have to.

Do I Qualify for Earned Income Credit While on Unemployment?   The Consolidated Appropriations Act (CAA) was signed into law on December 27, 2020 as a stimulus measure to provide relief to those affected by the pandemic. For tax year 2020, The CAA allows taxpayers to use either their 2020 or 2019 earned income in calculating the Additional Child Tax Credit (ACTC) as well as the Earned Income Tax Credit (EITC).

[mmmkay]

So if I qualified for the EITC in 2019, I qualify in 2020 due to the CAA, correct? How do you do this in turbotax because I see no option for it.

[JoannaB2]

It depends.  If you're single with no dependent, you may not qualify for earned income tax credit if adjusted AGI was more than $15,820 in 2020. Otherwise, you may be eligible to claim the EITC without a qualifying child if you meet all the following rules.

• Meet the EITC basic qualifying rules
• Have your main home in the United States for more than half the tax year

• Not a qualifying child on anyone else's tax return

• Be at least age 25 but under age 65 at the end of the tax year (usually Dec. 31)
• Your adjusted gross income (AGI) must be less than: $50,954 ($56,844 for married filing jointly) if you have three or more qualifying children,  $47,440 ($53,330 for married filing jointly) if you have two qualifying children, $41,756 ($47,646 for married filing jointly) if you have one qualifying child, or  $15,820 ($21,710 for married filing jointly).

You are not eligible to claim the EITC if:

• Your filing status is married filing separately
• You filed a Form 2555 (related to foreign earned income)
• You or your spouse are nonresident aliens.

[mmmkay]

 "For tax year 2020, The CAA allows taxpayers to use either their 2020 or 2019 earned income in calculating the Additional Child Tax Credit (ACTC) as well as the Earned Income Tax Credit (EITC)."

what does that mean exactly?

[DaveF1006]

What it means is that Taxpayers can use their 2019 or 2020 earned income to determine the amounts of their ACTC or EITC. To determine which in come to use, they can use both income scenarios in turbo tax to see which year's income will give the best credit. 

[mmmkay]

I did qualify for EITC in 2019, but turbo tax does not give me the option to use my 2019 income to qualify for EITC. Am I missing something? 

[DawnC]

Your AGI may be too much to qualify.   If you received a significant amount of unemployment, even using your 2019 earned income won't help.   You can use your 2019 earned income, but you still have to use your 2020 AGI.    Please read this TurboTax blog for more information.

To use the lookback feature in TurboTax Online, go to the Earned Income Tax Credit section.

1. In the Search box on the top right of your screen, enter EIC or eic and hit enter; click on Jump to eic
2. Follow the interview until you arrive at a page titled Do you want to use last year's earned income?  make a note of the amount of your credit using the 2020 earned income...
3. Click on Yes and enter your 2019 earned income and click Continue

TurboTax will show your new Earned Income tax credit using your 2019 earned income.   If the new credit is higher, click Continue to accept it.  If the new credit is lower, click Back to go back to the previous screen and click the radio button No then click Continue.

Generally, earned income includes wages (including non-taxable combat pay), tips, and other payments received for services you personally performed.

This usually includes the total of the amounts reported on:

 - Form 1040, line 1 (Wages, salaries, and tips)

 - Schedule C, line 3 of Schedule 1 (net business income)

 - Schedule F, line 6 of Schedule 1 (net farm income)    @mmmkay

[francisco-1]

I have a question about the EITC im not sure if im eligible im a us citizen i made 2020 32503.90 and i file as a head of household 

[JohnW152]

@francisco-1

If you have at least one qualifying child and you had earned income either this year or last year, you’ll probably qualify.  There are a number of requirements, however. 

Please see the TurboTax Help article What are the qualifications for the Earned Income Credit (EIC or EITC)? to see all the requirements.