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Child tax-credit checks of up to$400 will find their way into the mailboxes of more than 25 million eligible taxpayers this summer.
The checks, which are an advance on the child tax-credit, are part of President George Bush's campaign to boost the economy. The checks that will be issued total $13 billion. This comes just one month after Bush increased the total amount of money that the federal government can borrow by a record $984 billion, bringing the national debt limit to $7.4 trillion.
Eligible parents who claimed a child on their 2002 tax return received $600 per child. The Jobs and Growth Tax Relief Reconciliation Act of 2003 boosts the total amount of the child tax-credit to $1,000 by increasing the credit amount to $400 for each child under the age of 17.
The U.S. Treasury Department will send out the checks on three different dates throughout the summer. When eligible taxpayers receive their checks depends on the last two digits of their social security numbers.
The social security numbers are broken down into three groups: 00 to 33, 34 to 66, and 67 to 99. The checks will be sent out on July 25, Aug. 1 and Aug. 8, respectively.
Nick Reynolds of De Soto will be looking forward to the extra income that the tax credit will bring him and his family this summer.
"For the most part, my income during the school year comes from the Reserves," said Reynolds, 29, a senior in industrial engineering. "So this is a nice surprise."
Reynolds, a father of four, plans to put some of the money from the credit toward some of his home projects including some finishing work on his decks.
The IRS is reviewing tax returns that were filed this year in order to determine exactly who is eligible for the return and how much money those eligible are due.
If the adjusted gross income is above a certain level, the credit begins to phase out. This applies to married couples who file jointly and make more than $110,000, married couples filing separately making more than $55,000 and all others who make more than $75,000.
The wealthy were not the only ones who were exempt from receiving this refund. To keep the bill within budget guidelines, a provision was made that excludes anyone who did not owe income taxes from being eligible for the tax break because they did not make enough money.
The U.S. House and Senate have approved separate measures that would provide the credit for more than 6.5 million low-income workers who are now excluded. However, the two measures do not completely agree with each other, so lawmakers must come to some common ground before these taxpayers see any break.
Rep. Mike Bost, R- Murphysboro, said that the child tax credit check is a reflection of the current welfare program, which provides financial assistance and services, such as daycare and job placement, to those in need.
"The welfare program pays you for having kids, just as this program does," Bost said. "But in order to receive money through the tax credit, people have to work."
Bost said he sees this credit as a way to increase national and state employment rates through financial incentive.
