Thread: How to tell if you'll get the child tax credit

(I got this from msn.com)

The process
To recap for those of you who missed the story earlier this summer: Congress expanded the child tax credit for 2003 to a maximum of $1,000 from the previous limit of $600. Rather than make parents wait until next year to claim the extra money on their tax returns, lawmakers instructed the IRS to send the difference of up to $400 per qualifying child to those who claimed the credit in 2002.

The checks will be sent out in three waves, based on the last two digits of the parents’ Social Security numbers. (If both parents are on the return, it’s the number of the parent’s name that appears first that will determine the mailing date.)
If your number ends in 00 to 33, your check will be mailed July 25

For those in the 34 to 66 group, checks will be sent out Aug. 1

The last batch, those 67 to 99, will be mailed Aug. 8
The IRS will start mailing notices to taxpayers on July 22 telling them how much money they should expect. Most people won’t be getting anything -- remember, this tax break is just for parents, and only for those parents who took the credit last year, at least so far. (Congress is wrangling over extending the break to low-income families who are left out.)

Who might not qualify
The following groups of parents also may be left out or have special issues:

New parents. If your only child was born after Dec. 31, 2002, then you couldn’t claim him or her on your 2002 return, and you won’t be receiving a check. That doesn’t mean you’ll be left out entirely. When you file your 2003 return, you should be able to get the full $1,000 credit if you otherwise qualify (keep reading for details). In other words, you won’t get the money now, but you may get it later.

Parents of older children. The child tax credit can only be taken by parents whose children are younger than 17 on Dec. 31. If you have a child born before 1987, you’re out of luck, at least for that kid. (You could be getting up to $400 for any younger, qualifying children.)

One reader who asked to remain anonymous thinks that’s unfair. Kids start getting expensive around age of 17, especially if you’re sending them off to college, the reader said.

Divorced parents. Parents who alternate taking the credit will need to work out their own plans for the money. The IRS says it’s not getting involved. As if you didn’t have enough to argue about.

Technically, the money belongs to the person who will take the credit in 2003, even if the check is sent to the one who took it in 2002. Since the check is an advance on this year’s credit, it will have to be deducted from any credit claimed on the 2003 tax return.

If there’s any chance your ex might keep the money, divorce attorney Violet Woodhouse recommends sending him or her a letter immediately pointing out that the money belongs to you. Send the letter return-receipt requested and keep a copy.

This might not pry the cash loose, but it does give you a written record you can take to either small-claims or family court. The amount of money at stake might not be worth a trip to the courthouse, but Woodhouse guesses there are probably other financial matters that may need to be resolved. “If they’re not honorable enough to honor this,” says Woodhouse, a financial planner and co-author of “Divorce & Money,” “there may be other issues that they’re not taking care of, co-pays on insurance and deductibles, things like that.”

If you filed jointly last year but have since divorced, the check will be issued in both your names, and will technically require both your signatures to cash. That may give you some leverage in deciding who gets what.

Parents who owe the IRS or other government agencies. If you’re delinquent on federal or state income taxes, or owe other “nontax federal debt” such as overdue student loans, the IRS will use your advanced child-tax payment to help pay the bill. The notice you get from the IRS should tell you why your payment has been reduced and by how much.

Parents who make too much. If you made too much money last year to qualify for the credit, you won’t get a check this summer. But you may be able to get money back from the government next year.

Here’s how the income limitations work. The ability to claim the child tax credit begins to phase out when modified adjusted gross income exceeds $110,000 for married couples filing jointly, $55,000 for married couples filing separately and $75,000 for everybody else. The amount of the credit is reduced by $50 for every $1,000 (or portion thereof) that your income exceeds those limits.

So married parents with one child and modified adjusted gross incomes over $121,000 last year wouldn’t have been able to claim the credit, says tax analyst Mark Luscombe, and won’t get an advanced payment check.

The increase in the credit amount to $1,000 from $600, though, means that more higher-income parents will benefit. Now married parents with one child can earn up to $129,000 in 2003 and still get a partial credit when they file their 2003 taxes, says Luscombe, principal analyst for tax research firm CCH Inc.

Under the wire last year
Parents who make too much, Part II. Let’s say you did get the credit last year. Since then, however, your fortunes have improved, and you’ll make too much money in 2003 to qualify. Guess what? You’ll not only get a check this summer, but also you’ll get to keep it. It’s just the government’s way of saying, “Thanks for being a taxpayer.”

Mark Hensel of Dallas is in this fortunate situation. A four-month stretch of unemployment reduced his income last year to just over $100,000, so he was able to take the full credit for each of his two children, now aged 8 and 5.

Hensel won’t disclose what he’s making now, but says if he remains employed his ability to take the credit this year will be phased out almost entirely.

No matter. The IRS says he can keep his $800 check, even if he wouldn’t have been entitled to take the full credit for each child when he filed his taxes next April.

Parents who make too little. The news is not nearly so rosy for millions of low-income parents. Many are being left out of the government’s payments because they don’t make enough money to claim the full credit.

Low-income parents are typically allowed to claim a child tax credit that’s equal to 10% of the amount they make over $10,500, CCH’s Luscombe says. Those who make $15,000, for example, could take a credit equal to 10% of $4,500, or $450.

That formula wasn’t changed by the law that expanded the credit. So the parent making $15,000 will still be able to claim only a $450 credit on her 2003 taxes.

That disappoints Dorena Karlatiras, a single working mother in Cleveland. “I understand that we are already getting money back in the end,” she wrote, “but if we are single parents and not receiving any child support, is this really fair to us?”

A possible solution
Congress has a plan to increase the formula to 15% from 10%, which would benefit about 6.5 million families. But lawmakers are squabbling over details, including whether these families would get a check this summer or whether they would get to claim the larger credit when they file their taxes next year.

Thanks for posting that. I was wondering if We would get it or not. I guess We will.

Also, you can go here:
https://sa.www4.irs.gov/irfof/lang/e...cgetstatus.jsp

to check the status of your refund, This is the IRS site, just giving you a direct link to find out the info

If you don't owe back child support back taxes, or a federal debt, you WILL get it, it is just a formaility, they will be sending you a notice 3 days before they send the check to say you are getting it, or if someone else got it for a past debt(ie uncle sam, or state child support)

*****EDITED TO ADD
Question, line 38 of your 1040 A tax return, did you have a number greater than 0 for your total tax? If you did, multiply $400 per kid. Say you have 2 kids, if your amount on line 38 was more than $800, you will get the full $800, if the amount on line 38 was less than $800, you will get the amount on line 38.

Also, you had to have claimed the Child Tax credit on your 2002 form to get this refund

You're welcome, also read my edit on the post above, it might explain a little more.

I had an amount show up on mine, but, we are in the first mailing, yours might not be in the system yet, with you being in the second mailing.

Did you have an amount?

also, if you filled a joint return, use the SS # of the main SS (first person listed on your return)

Have you read my edit yet?

*****EDITED TO ADD
Question, line 38 of your 1040 A tax return, did you have a number greater than 0 for your total tax? If you did, multiply $400 per kid. Say you have 2 kids, if your amount on line 38 was more than $800, you will get the full $800, if the amount on line 38 was less than $800, you will get the amount on line 38.

Also, you had to have claimed the Child Tax credit on your 2002 form to get this refund