Calculating Earned Income Tax Credit and Child tax credit for 2020

[jenkinstl]

I'm wondering when TurboTax Deluxe 2020 will be updated for the changes in calculating the Child Tax Credit and Earned Income tax credit. Specifically, the option to use 2019 or 2020 income for the calculation

[MarilynG1]

TurboTax does have the option to choose 2019 or 2020 income for the Earned Income Credit.  In the Credits & Deductions section, choose 'Earned Income Credit'.  Continue to a screen asking if you want to use your 2019 or 2020 income (screenshot).  

TurboTax will show you the difference in your refund when you choose either year.  

Click this link for more info on Qualifications for Earned Income Credit. 

[jenkinstl]

Thank you.  I did see this in TurboTax yesterday as part of the Child Tax Credit calculation.  Based on a few articles I read on this one time change I expected the same question to be asked for the Earned Income Tax credit as well or at least one answer applied to both credits to determine what the best choice for the taxpayer. What am I missing?  Using 2019 earned income is the best in my case if I got 1 choice for both credits.  

[DianeW777]

In TurboTax screens the question "Do you want to use last year's earned income?" will display for both earned income tax credit (EITC) and Child Tax Credit (CTC) sections. On those screens you can choose to enter your 2019 income for the calculation if that is what you prefer to use.

In my scenario there was $15,000 from a W-2 and then $11,000 entered as income from 2019 (also tried $40,000) in both the CTC and EITC.

See the image below in the EITC section of TurboTax Online. 

Be very careful to review the refund amounts so that you are using the income year that best works for you.

Based on the following information from the IRS website the adjusted gross income (AGI) is a factor for making the determination about which year's income will be used to calculate the credit. Click here to view the IRS page.

• 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.

[jenkinstl]

Thank you for the reply. Currently TurboTax Deluxe on my Windows10 PC is only asking me the question once and it's for the Child Tax Credit.  It is not asking me the question for the Earned Income Tax Credit.

In my situation using 2020 income is best for the Child Tax Credit and using 2019 income is best for the Earned Income Tax Credit. If I had to choose one income for both credits it would be 2019.   It doesn't offer that option either

I wonder if TurboTax Deluxe for Windows hasn't been updated yet for the income question for the Earned Income Tax Credit?

[ErnieS0]

Yes, TurboTax Deluxe for Windows does include the option to use 2019 income for purposes of computing the Earned Income Tax Credit.

TurboTax asks Did your earned income decrease in 2020? Select Yes.

TurboTax then shows the refund based on 2020 income. Click Continue. You will be asked to 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 income. Try it both ways in TurboTax and see what works best for you.

For more information see Earned Income Credit.

[jenkinstl]

I am not getting these screens in my TurboTax app.  When I just opened the app it did not download any updates and I do not get these screens .  What am I doing wrong?  Is there a way I can chat or talk with someone from Intuit/TurboTax?

[DoninGA]

---

@jenkinstl wrote:

I am not getting these screens in my TurboTax app.  When I just opened the app it did not download any updates and I do not get these screens .  What am I doing wrong?  Is there a way I can chat or talk with someone from Intuit/TurboTax?

---

See this TurboTax support FAQ for issues with the Earned Income Tax Credit - https://ttlc.intuit.com/community/tax-topics/help/why-am-i-not-able-to-claim-the-earned-income-tax-c...

[jenkinstl]

A;lso, I'm wondering if this statement you sent me is correct, "If your earned income was higher in 2019 than in 2020, you may get a higher EITC credit by using 2019 income. Try it both ways in TurboTax and see what works best for you." 

I'm wondering if the choice of tax years for income for calculating the EITC and CTC is only an option if 2020 income is lower than 2019?