How does it work when choosing last years earned income for child tax credit. Would I be able to, its giving me the option. Or do i just go by my 2020 earned income?

[KathrynG3]

Yes. You are allowed to use last year's income (2019) instead of this year's income (2020) to calculate the Child Tax Credit.

Earning more income in 2019 would mean the Child Tax Credit could potentially be larger depending on the rest of your circumstances. 

TurboTax will walk you through this election in the Deductions & Credits section where you read the message that this was an option.

If you would rather calculate this yourself, click the link to use the worksheet on page 10 of Publication 972 Child Tax Credit and Credit for Other Dependents.

[jaquino91191]

I made the mistake of not using 2019's earned income in order to calculate my qualified credits for 2020. I have already filed and I am set to receive a refund this week. However, my question is, am I able to amend in order to recalculate my earned income? Can I fix this small error through amending in order to get the qualified credits I am entitled to this year and every year? I was not aware of this stipulation until after I filed this year early this month. Please any information is helpful. @KathrynG3 

[KathrynG3]

Yes, you can file an amended return for adjusting the Earned Income Credit.

To do this, Form 10404-X will be needed. This form will not be finalized for another few weeks. Click the link for the most recent information about when Form 1040-X will be available.

• To Amend(change) your 2020 TurboTax Online return, follow these steps:
  • Open the return--you will be at Tax Home.
  • Scroll down to Your tax returns & documents and Show.
  • Select 2020, and Amend(change) return.

Only after the amended return is started, navigate to the Earned Income Credit section and make your update.

To return to this section, enter earned income credit in the search box inside TurboTax and select the Jump to link in the search results.

@jaquino91191

[jaquino91191]

Thank you so much for that detailed description on what I should be expecting to do next. I appreciate your time and patience! The Amending form should be up at the end of this month, correct? 

Once I have submitted the form, will it then update the EIC I was entitled to earn with 2019's return and will they send me a second return? how will that work being that I am set to receive a return this week? 

[ReneeM7122]

Form 1040X, Amended U.S. Individual Income Tax Return will be available on 03/25/2021.

 Here is a link for all the TurboTax forms availability.  

Once you have submitted the form, it will then update the EIC I was entitled to earn with 2019's return.  If you receive a refund this week, hold onto it and factor it into your 1040X.

@jaquino91191

[jaquino91191]

I did receive a refund for federal and state already, would I have to factor those into the amended return? Will it be clear and ask me to submit it, I've never had to amend before and I am afraid of the process!

[AmyC]

The program assumes you have the money but always has a place for things to be changed. It is an easy process. Be sure that you are eligible to amend first. The EIC and CTC uses the higher of 2019 or 2020 income. If your 2020 income was higher than 2019, you would not be eligible to amend for those credits. If 2019 was the higher income, then you would amend.

Once your return is accepted and the finances are settled, you can file an amended return. 

• Save a copy of the original return before doing an amended return. See: 
  • how to file an amended return.
  • I need to amend my state return.
  • Can I e-file my amended state return?
  • Can I e-file my 1040X to amend my return?
• Track amended return status online. Taxpayers can track the status of their amended tax return in English and Spanish using Where’s My Amended Return?  Amended returns take up to 16 weeks to process and up to three weeks from the date of mailing to show up in the system.