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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:
I did not have "reduced work hours," I was not laid off, and I did not receive unemployment, and yet I am still being offered this option to use my 2019 income to calculate my child tax and earned income credits. Is it legal for me to do this, when I had no employment for all of 2020?
Thank you!
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