Desktop - Using Prior Year Earned Income to Compute EIC and CTC
Is it Possible to Use Previous Year Earned Income to Calculate EIC and CTC?
Yes. you can use previous year Earned Income to calculate EIC and CTC.
The Consolidated Appropriations Act of 2021 grants taxpayers who lost their jobs or had a change in their earnings in 2020 the power to calculate either or both the EIC and CTC on their 2020 tax return in the event that their 2020 earnings was less than that of 2019.
2019 earned income can be entered in the 2020 tax return through the following steps:
- Go to the main menu of the tax return
- From the menu, select Personal Information
- Then select Other Categories
- Proceed to COVID/Disaster & Electing to Use PY Earned Income
- Click on Yes then, in the space provided, enter the taxpayer’s 2019 earned income. You can access the 2019 earned income by going to the 2019 tax return and checking out the EIC Worksheet A, line 1, EIC Worksheet B, line 4b, or Schedule 8812, line 6a.
The EIC and CTC will be calculated by the program, using both the previous and current year earned income amounts. The program also automatically determines and uses the resultant amount in the larger credit.
Additional Information: