Lost a job or income? Don’t lose access to key tax credits
Americans who lost their job or some of their income in 2020 should pay attention to a new, one-time provision that ensures they don’t lose access to valuable tax credits as well.
The “lookback” rule allows taxpayers to use either their 2019 or 2020 income, whichever is most beneficial, in order to get the most out of the Earned Income Tax Credit and the Child Tax Credit. These are considered the two most valuable tax credits for low- and moderate-income working families.
Together, they lift more working-age people out of poverty than any other government program, said Elaine Maag, a principal research associate at the Tax Policy Center.