EIC based on 2019 earned income

[BSG]

I have a client who did not qualify for EIC in 2019 because of a small income from an investment, but would have qualified for EIC if only based on his earned income. Can I use  just the earned income from 2019 to figure his EITC for 2020 or is he disqualified from using his earned income from 2019 because he had the investment income.  He qualifies for EIC in 2020 but 2019 would give him a larger credit.

[qbteachmt]

Here: https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/who-qualifies-for-the-ea...

[BobKamman]

Yes

[athaureaux6]

He may qualify only if the earned income  in 2020 is less than the earned income  in 2019. You do not specify if the earned income in 2020 is greater than in 2019. It does not work both ways, it only applies when the earned income in 2019 is greater. They see this this way, if your earned income in 2020 is greater than in 2019, you were not affected for the pandemic. If you look at the worksheet, Letter C, it says that if your earned income in 2020 is more than in 2019, you do not qualify to use the provision. This law is intended for low income or moderate income people that  because of the virus, lost some earned income and as a result the EITC was reduced. Hope it helps. 

[TaxGuyBill · Accepted solution]

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@BSG wrote:

Can I use  just the earned income from 2019 to figure his EITC for 2020 

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"Earned Income" is the only potential thing that is used to calculate the 2020 EIC.  Everything else is based on 2020 information.

[BSG]

Yes he had more earned income in 2019 than in 2020.  He did not qualify for EIC in 2019 on that Earned Income because  of the investment income.

So I think you are saying that the fact that the investment income disqualified him from getting  the EIC in 2019 doesn't prevent him from using his earned income from 2019 to figure the EIC for 2020.