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The Jobs and Growth Tax Relief Reconciliation Act of 2003 provided many taxpayers with an advanced payment of the child tax credit. The Act increased the credit from $600 per qualifying child to $1000 per qualifying child. The IRS sent out the advanced payment checks in late July and early August, giving taxpayers an additional $400 per child claimed on their 2002 tax return.
Many lower income taxpayers did not receive this advanced payment because they did not owe the IRS any tax. Because the taxpayer did not owe any tax the additional $400 per child would not have been a benefit to the taxpayers return. When filing your 2003 Federal Income Tax Return, taxpayers will be able to claim $1000 per qualifying child for the Child Tax Credit, however, you will need to subtract out what you've already received. Please see the example below: Tom and Betty have 3 children. All 3 children qualify for the Child Tax Credit. On Tom and Betty's 2002 Income Tax Return they received $1800 in Child Tax Credit. They still owe the IRS tax in the amount of $4200. In early August 2003, they received the Advanced Child Tax Credit Payment in the amount of $1200. When Tom and Betty file their 2003 Income Tax Return, they will be able to claim a $3000 ($1000 per child) Child Tax Credit. They have already received $1200 (from early August) of the $3000 that is claimable. So Tom and Betty will receive a $1800 Child Tax Credit on their 2003 Federal Income Tax Return. If you have any additional questions regarding this issue, please contact our Customer Service Department
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