EIC Base

[Corduroy Frog]

So much of what may be relevant for 2021 could be easily tied up in pending legislation, so I am intentionally waiting to ask questions until the verdicts come.  But I understand the EIC base is already in place.

Specifically, the calculation for EIC, I'm told, will be based on the greater of:

• 2021 EIC, as calculated.
• 2020 EIC, as calculated.

However, my question:  What if 2020 EIC was based on 2019? as was the case with many last year?

In other words, Taxpayer A has EIC

• based on 2021 circumstances
• based on 2020 circumstances, but the actual EIC was based on 2019.
• based on 2019 circumstances.

i.e. the greater of three years, instead of two.

[Gail in Virginia]

I believe you are overthinking this.  I think the 2019 could be used in 2020, but has no bearing on 2021 even if it was used  to calculate the  2020 return.  I think.

[TexTaxToo]

Actually, 2019 can be used again in 2021.  But 2020 cannot be used in 2021.

So for 2021, you can use 2019 earned income to calculate EIC if it is higher than 2021 earned income and if doing so is beneficial (you don't have to use it).