IRS Revises FAQ for Claiming the Earned Income Tax Credit

The rules for claiming the earned income tax credit were expanded and liberalized in the wake of the COVID-19 pandemic.The IRS has recently updated its guidance on claiming the credit to provide that taxpayers who are eligible for the credit can choose to calculate the earned income tax credit using their 2019 earned income if it was higher than their 2021 earned income, even if they did not have any earned income in 2021. Taxpayers who did not file a return or claim the earned income tax credit for 2020 or 2021 can file an amended return to take advantage of the relief. However, the IRS was clear to note that these taxpayers cannot use their 2020 income to calculate their 2021 earned income tax credit. For more information on the personal tax credits, visit Tax Facts Online. : Q 758. Note: Q is updated.