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2foxy
Returning Member

Can I use my ihss 2014-7 non taxable income in calculating my 2020 CTC and ACTC only?

I am an ihss parent provider for my son. I also have self employment income from ebay sales. My 2014-7 ihss income is not taxable but it can be included in earned income to claim any of the refundable credits. I choose not to include it as earned income for the EIC because Im opting to use my income from 2019 instead, but I want to use my 2020 income (including my 2014-7 ihss income) for the ACTC. How do I go about entering this on turbo tax? When I select the option to use my 2020 income for CTC and ACTC, it does not include my ihss income as earned income. 

2 Replies
xmasbaby0
Level 15

Can I use my ihss 2014-7 non taxable income in calculating my 2020 CTC and ACTC only?

No.   The "lookback" is only for using 2019 EIC or 2019 Additional Child Tax Credit amounts.   You cannot throw in amounts from 2014 to 2017 as well.

 

 

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.
**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
2foxy
Returning Member

Can I use my ihss 2014-7 non taxable income in calculating my 2020 CTC and ACTC only?

2014-7 is the number of the IRS Notice for Excludable Medicaid Waiver payments that IHSS falls under the category of. My question pertains to the special rules for this specific type of income, including a recent change the rules for taxation. 2014-7 income is unique in that it is not taxable but it can be included in earned or gross income if it is beneficial for the tax payer. This income can be counted as earned income to calculate refundable credits while being non-taxable at the same time. 

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