EITC ELECTION FOR NEW CUSTOMER

[athaureaux6]

Hi, everybody I would like somebody to explain this me: I have a new client with around 8550 earned income in 2020 and 12452 in 2019 head of household with two small children. I am sure that she will benefit using the PYEI election. And she did, but that is weird is that I used the election and she in fact benefit more but what is strange to me that as you know PS will calculate the earned income for 2020 but because she was not  my client in 2019 I checked the copy from last year and I input the 12452 where it is says earned income from 2019 and I selected the check to use the election. When the software transfer the words PYEI I saw the amount on the dotted line 8550. The law says enter the PYEI and the amount from 2019. 

To make this more weird, I have another client who was my client in 2019 and will benefit from the election because she worked only a lit bit in 2020. When the software transfer the words PYEI, this time it did it correctly, inputting the amount from 2019. 

I would like somebody to try with somebody to use the election with someone who was not your client last year to see what happens. Thank you. 

[Terry53029]

Worked for me, don't forget EIC uses earned income or AGI which ever is lower

[rjholton]

I had the same exact thing happen.  For a client who benefits from the election and was my client in 2019, ProSeries is showing the 2019 income next to the "PYEI" notation.  When I did the same thing for a new client, ProSeries shows the 2020 income next to the "PYEI" notation.  In spite of this, it calculated the credit correctly based on the 2019 income for both clients.  Assuming you have a copy of the 2019 return and have ProSeries 2019, entering all the 2019 data in ProSeries 2019 then doing the transfer to 2020 might resolve it, but I haven't actually tried this.  I'm holding off and hoping an update might resolve the issue since e-file doesn't open until February 12th anyway.  

[IRonMaN]

Based on the fact that if the clients are in this early, the returns can't be overly complicated.  If you are having issues and probably most of what you enter in 2019 will save you most of your keystrokes for the 2020 return, I would just redo the 2019 return and then roll the return over to the new year.

[athaureaux6]

You are exactly right, the credit was calculated correctly but it has to be a glitch in the system, hope the fix it. I am going to try erase the return for the new client I had in 2020, fill the information in the 2019 and when the program transfer the earned income to the 2020, I will see what happens. I will keep you posted. 

[Terry53029]

I stand corrected, I only looked at the amount of the credit which was correct, but when I printed a preview it is showing this years income next to the notation on the 1040. Maybe @Orlando will look into it for us

[athaureaux6]

Hi everybody, this has to be a glitch. I posted the original question; This is what I just did: 

I erased the 2020 return for my new client. I prepared the return for 2019, thanks God was very simple. Then I prepared the 2020 return, PS transferred the amount of the earned income for 2019, and 2020 and I just select the PYEI election and this time it did it right, it wrote in the dotted PYEI and the 2019 amount. It is not that weird. 

An Intuit employee, please send this concern to the appropriate team. 

[Orlando]

l'll pass it along to the 1040 team.. expect an update from one of them. Thank you for looping me in.

[athaureaux6]

Thank you Orlando 

[SDJayhawk]

This has been reported to the development team.

[Dependable]

On what form or screen to you use PYEI election?

[rjholton]

It's on the Earned Income Credit Worksheet.  Below line 5 there is a smart worksheet that allows you to elect to use 2019 earned income.  Don't forget to also make the election on Schedule 8812 if necessary.  That election is to use the 2019 earned income to calculated the additional child tax credit.  That option is found in a smart worksheet on Schedule 8812 under line number 5.  You have to elect each one separately if your client is eligible and it is advantageous to do so.

[athaureaux6]

Go to Line 27 of the 1040, go up and you will see PYEI election, remember, only can be used if the earned income in 2020 is less than in 2019 and it is too low that you taxpayer will benefit using the 2019. Be careful, and good luck. 

[Dependable]

Thank you