I. Child
Tax Credit
ØA. The child tax credit was increased for the current
year from $600 to $1,000,
with the increased amount to be paid in
advance, beginning in July. The advance payment will only be sent to those who filed tax returns last year showing a qualifying child, but if the credit is not
received in advance, it can be
claimed as a credit on the 2003 return.
The advance payment is intended to inject cash into the economy as a stimulus as well as to provide
help for families.
ØB. The credit will be built into withholding tables
for 2004
ØC. After 2004, prior law applies, reducing the credit
to $700, with phased
increases in future years, back to $1,000
in 2010, then back to $500 for 2011, so timing is everything! The fluctuations seem arbitrary to
taxpayers, but are based on
budgetary constraints for the tax reductions.