changes to EIC?

[joanmcq]

I seem to remember that the Covid acts had changes to EIC.  Was it just that the income limits went up or did the qualifying children's ages go up too? 

[Pacun]

Let's say someone who had EI of $20K in 2019 and in 2020 his EI is only $1k EI and unemployment $18,200, he can use his EI from 2019 and calculate the EIC based on $20K vs $1K. If he uses 2019 EI to calculate EIC, he must use it for Child Tax credit and additional child tax credit.

[TexTaxToo]

I think you are referring to the changes in the just passed ARPA.  They apply to 2021 only.  The act makes 17-year-olds eligible for CTC and ACTC (and increases the amount, makes it all refundable, and other changes). 

The qualifying child rules for EIC did not change (there was no under-17 rule for EIC).  The act does allow EIC for younger and older adults (below 25, above 65) who are not dependents and have no qualifying children.  The phaseout limits and investment income limit increase for EIC, and you can continue to use 2019 EI in 2021.

[joanmcq]

Thanks!  I got a new client in whose sons are 19 & 21, both students, and the program qualified them for EIC.  I haven't had this situation before; just want to make sure its kosher.

[Lion EA]

Per a class I took, the only two 2020 changes for personal returns are unemployment and APTC repayment.

EITC changes are for 2021. And has some tricky changes:

For 2021 only, no children, 19 eligible for EITC and no top age.

Under 24 and AOTC eligible (student at least 5 months) single EITC eligible until age 25 or no longer AOTC eligible.

Investment income $10,000 adjusted for inflation every year (permanent change).

And, on and on.