Rebate Check/Credit For 2001

For 2001 only, Congress decided to implement the new 10% rate reduction as a tax credit and to deliver that credit in the form of the much publicized rebate check.  Thus, taxpayers are entitled to a credit in tax year 2001 equal to 5% of the amount of income that would otherwise be eligible for the new 10% rate bracket above. 

Rebate checks will be mailed by October 1 to taxpayers (other than dependents) based on year 2000 tax returns already filed with IRS.  Taxpayers must reconcile the advance rebate check with the actual credit earned by completing a worksheet in Form 1040 instructions for tax year 2001.

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