| June
26, 2003 -- One of
the benefits that individual taxpayers may receive in 2003
is a retroactive increase in the child tax credit from $600
to $1,000 per eligible child.
A child is eligible as long as they are under the age
of 17 as of
December 31, 2003
. Taxpayers with
an eligible child will receive the full credit as long as
their Modified Adjusted Gross Income (MAGI) does not exceed
$110,000 for joint filers, $75,000 for unmarried individuals
and $55,000 for marrieds filing separately.
The credit is reduced by $50 for every $1,000 of
income above the MAGI limit listed above.
An
immediate benefit will be realized with this portion of the
Act, as the Act provides that eligible taxpayers will
receive advance payments of the increase starting in late
July. The IRS
expects to have three principal mailings based on the last
two digits of eligible taxpayers’ social security numbers.
Checks should be mailed on July 25 to taxpayers
who’s social security numbers end in 00 – 33.
The next mailing will be on August 1 to taxpayers
with social security numbers ending in 34 – 66.
The final mailing will be on August 8.
Only eligible taxpayers who have filed their 2002
returns and the returns have been processed by the IRS will
receive the advance payments.
An eligible taxpayer is a taxpayer who (1) claimed
the child tax credit on their 2002 tax return, (2) filed
Form 1040 or 1040A or filed electronically, and (3) has a
child born before 1986. The amount of the advance payment
varies from eligible taxpayer to eligible taxpayer.
The maximum amount is $400 per child.
A taxpayer who received a full tax credit of $600 per
child in 2002 will receive $400 per child.
If the tax credit was reduced in 2002 due to the
phase out provision or earned income limitations, the amount
of the advanced payment may be somewhat less.
The $1,000 child tax credit is for the 2003 and 2004
tax years. In
2005 through 2008, the credit will be reduced to $700, in
2009, the credit will be $800 and in 2010 the credit will be
$1,000. If you
have any questions or need additional information concerning
this or any part of the 2003 tax act, please contact us at info@asherco.com.
Back to 2003 News
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