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Is there a limit on the election to use prior-year earned income?

Gildardo
Level 3

I have a client that in 2020 taxes elect to use 2019 earned income for EIC.

Can she also do it for 2021? or is there a limit on this?

Thank you.

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athaureaux6
Level 8

You can use the 2019 election ONLY if the earned income in 2019 is greater than 2021, If your income in 2021 is greater, you can not use this election. It was designed for the people who were used to get the EITC before the virus and were affected by the pandemic in 2020 and 2021. Again, if you made more in 2021 than in 2019, it means you gained during the pandemic, so not election is allowed in that case. Thank you. 

 

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2 Comments 2
Ludy
Level 2

In 2021 you have the option again to use 2019 earned income to see which gives you the better benefit

athaureaux6
Level 8

You can use the 2019 election ONLY if the earned income in 2019 is greater than 2021, If your income in 2021 is greater, you can not use this election. It was designed for the people who were used to get the EITC before the virus and were affected by the pandemic in 2020 and 2021. Again, if you made more in 2021 than in 2019, it means you gained during the pandemic, so not election is allowed in that case. Thank you.