{"id":55223,"date":"2021-03-22T06:02:00","date_gmt":"2021-03-22T11:02:00","guid":{"rendered":"https:\/\/www.hrblock.com\/tax-center\/?p=55223"},"modified":"2022-03-18T12:38:56","modified_gmt":"2022-03-18T17:38:56","slug":"lookback-rule","status":"publish","type":"post","link":"https:\/\/www.hrblock.com\/tax-center\/filing\/credits\/lookback-rule\/","title":{"rendered":"\u201cLookback\u201d rule lets you use 2019 income on two credits"},"content":{"rendered":"\n

Editor\u2019s Note: This article was originally published on January 15, 2021.<\/em><\/p>\n\n\n\n

Taxpayers who claim the Earned Income Credit (EIC) and Additional Child Tax Credit (ACTC) received some good news recently. Recent legislation lets you continue to claim these valuable credits\u2013even if your income changed.<\/p>\n\n\n\n

EIC 2020-2021 and ACTC 2020 impacts<\/h2>\n\n\n\n

With this new \u201clookback\u201d rule, you can choose to use your 2019 earned income information to determine your eligibility for the Earned Income Credit<\/a> and the Additional Child Tax Credit<\/a> if your 2020 earned income is lower than your 2019 earned income and doing so results in a larger credit.<\/p>\n\n\n\n

For the EIC, you\u2019ll also have the option to use your 2019 earned income for your 2021 return thanks to changes from the American Rescue Plan Act.<\/p>\n\n\n\n

Why the lookback rule is important for those with unemployment or a job change<\/h2>\n\n\n\n

Without the lookback rule, some taxpayers would qualify for a lower credit than the prior year or potentially even not qualify for these two credits. This could be due to receiving unemployment income or because they had a job change and are earning less.<\/p>\n\n\n\n

\"Man<\/figure><\/div>\n\n\n\n

The key to qualifying for these credits is earned income, so here\u2019s why those life changes matter in the context of the pandemic:<\/p>\n\n\n\n