Based on the new tax law you can claim the previous year's (2019) income if it were more than 2020. How do I input that in my return? Use the W-2's?

[ColeenD3]

The program will account for it. You just enter your earned income from your 2019 return.

Yes you can use 2019 earned income instead of 2020 income to compute the child tax credit.

To do this in TurboTax:

• In Search, type earned income credit,
• Click Jump to earned income credit,
• Answer the questions until you reach Do you want to use last year’s earned income?
• Click Yes and enter your 2019 Earned Income.

If your earned income was higher in 2019 than in 2020, you may get a higher EITC credit by using 2019 earned income. Try it both ways in TurboTax and see what works best for you.

[holmes83usmc]

Thank you! Do I input my W-2's? Do I include my IRA distribution?

[ColeenD3]

Earned Income from 2019 would include money you earned from work. W-2, self-employment income, etc. An IRA distribution was not earned. Please see this LINK for a more complete definition of earned income.

[holmes83usmc]

My W2 and ira distribution forms were automatically transferred over from my previous year's returns. Do I delete those since I put my earned income from the previous  year under the earned income credit screen?

[ColeenD3]

. Don't delete anything that was brought over. It should have been only the format without any amounts.

[arlene8693]

I can not get it to give me a screen to allow me to use 2019 income. Please provide another method

Last year I had a different problem with turbotax so after multiple calls with multiple tiers.  I had to file by paper in March.  One  refund took 5 months and the other one over 11 months (check is in the mail finally). I do not want to file with paper again !!!

[xmasbaby0]

No---you have heard a little snippet of information that has you confused.

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.