Can we use 2019 wages to calculate earned income credit for 2020? Turbotax is not giving me the option.

[JohnB5677]

 If your earned income was higher in 2019 than in 2020, you can use the 2019 amount to figure your EITC for 2020. This temporary relief is provided through the Taxpayer Certainty and Disaster Tax Relief Act of 2020.

To claim the Earned Income Tax Credit (EITC), you must have what qualifies as earned income and meet certain adjusted gross income (AGI) and credit limits for the current, previous and upcoming tax years

Earned Income and Earned Income Tax Credit (EITC) Tables | Internal Revenue Service (irs.gov)

You can go to 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.

I want to use my 2019 tax return to file for 2020 ... (intuit.com)

[ma2272]

What is happening in my case is that this option to use 2019 is only available for the Child Tax Credit (ACTC) I select yes then when I get to the Earned Income Tax Credit (EITC) it says I do not qualify when I should if I use my 2019 tax. Please help!!

[Irene2805]

If your 2020 adjusted gross income (AGI) is too high, you don’t qualify for EIC, whether you use your 2019 or 2020 earned income.  That’s why the program isn’t giving you the option.

IRS Pub. 596 - Earned Income Credit (EIC) states that:  "You can elect to use your 2019 earned income to figure your 2020 earned income credit (EIC) if your 2019 earned income is more than your 2020 earned income."  

You can review Worksheet A on p.45 of the Instructions for Form 1040/104SR to see how the computation works.

@ma2272

[CliveAlive]

I'm having a similar issue but I'm wondering if it's a technical glitch. I initially used my 2020 numbers to calculate EIC. When I revisited the section to try my 2019 income number (which is lower) It makes no change in the calculation. I thought it was odd that the credit is identical with different income numbers. Even after changing to the 2019 option, Turbotax displays the 2020 figures under the "explain why" information. I'm also curious as to why my last year's credit shows a much larger number (in TurboTax) if I'm using the same information to calculate this years'. I tried putting the figures into the irs.gov "Earned Income Tax Credit Assistant" and got the matching number for 2020's info but a much higher number with my 2019 income. Anyone have a good explanation for this?

[MaryM428]

If nothing else has changed, then the higher earned income should give the higher amount of earned income credit.  But there are upper limits on the earned income credit and that may be affecting your number.

Here are EIC qualifications

[badams_taxes]

Why does TurboTax automatically use 2019 wages to calculate earned income credit instead of allowing the customer to use 2019 or 2020? For some reason being single, 2019 wages $62,891, 2020 wages $33,162, and 2021 wages $21,169, and I still do not qualify for the earned income credit. I do not understand. Please advise.

[badams_taxes]

I believe there is a glitch in the system. Why does TurboTax automatically use 2019 wages to calculate earned income credit instead of allowing the customer to use 2019 or 2020? For some reason being single, 2019 wages $62,891, 2020 wages $33,162, and 2021 wages $21,169, and I still do not qualify for the earned income credit. I do not understand. Please advise.

[LenaH]

For 2021, you can use whichever year's earned income, 2019 or 2021, that gives you the highest credit. However, you cannot use 2020.

In addition, please choose no to the screen in the federal return that asks you if you want to check your 2019 income to see if you are getting your max credit since you would not qualify with 2019 wages. 

Follow the steps below:

1. Open your return.
2. Search eic with the magnifying glass tool.
3. On the page Let's make sure you're getting your max credit, choose No. 
4. Follow the on-screen instructions.

@badams_taxes

[badams_taxes]

I chose No but the response was "It turns out you don't qualify for this credit."

[RaifH]

Did you have any other income in addition to wages that you reported on your tax return? Your 2021 wages of $21,169 should qualify you for a $39 Earned Income Credit, but it would be reduced to 0 if your income were above $21,430. You would also not be eligible for the Earned Income Credit if you were under age 19 or 24 if a full-time student. 

@badams_taxes 

[badams_taxes]

I looked at the EIC Worksheet and line 8 is $39. How come TurboTax did not mention the $39 when I chose "No"? Yet in still, the response was, "It turns out you don't qualify for this credit." Thank you!

[RaifH]

Did you get to the screens that asked Did you live in the U.S. for more than six months in 2021? and Let's check for uncommon situations.

If you did not live in the U.S. for six months, you would not be eligible for the credit. You also would not be eligible if any of those uncommon situations applied. You would also not be eligible if you were under 24 and a full-time student or under 19 or someone's dependent. 

If none of those are disqualifying you from the credit, it may just be caused by some old information getting stuck in the interview. You can try to clear your cache to see if that resolves the error. To check if the Earned Income Credit is being added to your return, you can preview your 1040:

1. Open or continue your return.
2. Select Tax Tools in the left menu (if you don't see this, select the menu icon in the upper-left corner).
3. With the Tax Tools menu open, you can then view your 1040 form: Select Tools. Next, select View Tax Summary in the pop-up, then Preview my 1040 in the left menu
4. Scroll down until you see Form 1040 Line 27a Earned income credit.