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Education Incentives Estate & Gift Reform Retirement Plan Incentives
FAMILY TAX RELIEF
Increased Child Tax Credit
The new law increases the child tax credit from $500 to $1,000 as follows:
Years Credit
2001-2004 $ 600
2005-2008 $ 700
2009 $ 800
2010 and later $1,000
Also, the child credit becomes partially refundable to the extent of:
· 10% of earned income over $10,000 in years 2001-2004, and
· 15% of earned income over $10,000 in years 2005 and thereafter.
The $10,000 amount is indexed for inflation beginning in 2002 and special rules apply for low-income families with 3 or more children.