Under the Consolidated Appropriations Act of 2021, taxpayers who experienced a job loss or change in their income in 2020 can elect to use their 2019 earned income to calculate the Earned Income Credit and/or Additional Child Tax Credit on their 2020 tax return if their 2019 earned income was more than their 2020 earned income. In 2021, Congress extended the ability to use the 2019 earned income in these calculations for tax year 2021.
To enter a taxpayer's 2019 earned income in their 2020 or 2021 tax return in TaxSlayer ProWeb select:
- Basic Information
- Personal Information
- Taxpayer wishes to elect to use their 2019 earned income to figure their 2020/1 earned income credit and/or child tax credit - check the check box.
- Designation - Enter COVID19.
- Enter the taxpayer's 2019 earned income in the space provided, and if applicable enter the 2019 nontaxable combat pay. 2019 earned income can be found in the 2019 tax return in three places
- EIC Worksheet A, line 1
- EIC Worksheet B, line 4b
- Schedule 8812, line 6a
The program will calculate the Earned Income Credit and Child Tax Credit using both the prior year earned income amount and the current year earned income and will automatically determine and use the amount that results in the larger credit.
Additional Information: