Submitted By: someone
Answered: March 1, 2021 9:00 pm

I heard I could use my 2019 earned income instead of my 2020 earned income in figuring my earned income tax credit for 2020. Is this true?

Yes. The Consolidated Appropriations Act, 2021, created a one-year opportunity. Use the prior year’s income if it results in a larger earned income tax credit. But don’t if it results in reducing or barring the credit.

advertisement
Tax Glossary

Health reimbursement arrangement (HRA)

Employer established account that provides tax-free reimbursements to employees for deductibles and other expenses that could be taken as itemized deductions.

More terms