Tax Law Changes

Return to 2003 Tax Law Changes 

2003 Tax Law Changes

Frequently Asked Questions About Advance Child Tax Credit Payments

Starting July 25, the IRS will begin issuing advance payment checks to about 25 million taxpayers who claimed the child tax credit on their 2002 tax return. Taxpayers who did not claim a child tax credit on their return will not receive an advance payment. The payment is an advance refund of the expanded child tax credit for the 2003 tax year. The child tax credit will increase to a maximum of $1,000 per child from $600. Taxpayers could receive up to $400 for each qualifying child they claimed on their 2002 return.

To help taxpayers, the IRS has answers to some commonly asked questions.

  1. What do I need to do to get an advance payment check?

    Nothing at all - the IRS will take care of everything. We're using your 2002 tax data to automatically figure whether you're due an advance payment check and if so, how much it will be. If you're getting an check, we'll notify you shortly before we mail it. You won't need to call or fill out any forms or applications.

  2. How do I find out if I'm eligible?

    Generally, you're eligible if you claimed the child tax credit on your 2002 tax return and your qualifying child was born after 1986. The IRS will send you a notice of your advance payment amount a few days before your check is mailed.

  3. When will I receive my check?

    The Treasury will mail most of the advance payment checks on July 25, August 1 and August 8 - more than 8 million checks each week. The mailings will be scheduled according to the last two digits of the Social Security number that appears first on the 2002 tax form.

    Treasury will continue to mail checks until late December to taxpayers who filed returns after April 15, such as those who requested automatic extensions. If you are one of these filers, do not change your 2002 return or payment amount based on your expectation of receiving an advance payment check. If you are eligible, you will receive your advance payment after the IRS processes your 2002 return.

  4. Why is Treasury mailing the check instead of using direct deposit?

    People often change bank accounts. While people also move, a mailed check can and will be forwarded to a new address. However, a direct deposit cannot be forwarded if a bank account has been closed.

  5. I have moved since filing my 2002 tax return - how will my check reach me?

    You should file a change of address notice with the U.S. Postal Service to ensure that your advance payment check may be forwarded to your new address. Without your current address, the check could be returned to the IRS as undeliverable.

  6. I have not filed my 2002 tax return yet, can I still qualify for an advance payment?

    Yes. If you filed for an extension, you have until Aug. 15 to file your 2002 tax return. (Under some circumstances, you may seek another extension until Oct. 15.) If you claim a child tax credit on your 2002 return, follow the 2002 tax law in figuring the amount. Do not change your return or your tax payment in anticipation of an advance payment. If you are eligible for the advance payment, we will mail your check four to six weeks after we receive your 2002 tax return.

  7. My spouse and I have divorced and the advance payment check is made out to both of us - can I cash it?

    If the check is made payable to two parties, then both parties must endorse the check on the back. Even if the two parties are now divorced, both must sign the check.

  8. Will I qualify for an advance payment if my qualifying child turns 17 on December 31, 2003?

    No. Your qualifying child must have been born after 1986 for you to be eligible for an advance payment.

  9. What if I receive an advance payment that's larger than the Child Tax Credit I am entitled to claim on my 2003 return?

    When figuring your 2003 child tax credit, you will subtract your advance payment from the amount you would otherwise claim. If your advance payment was more than this amount, you will not have to repay the difference. The new law bases the advance payment on the child tax credits claimed on the 2002 tax return. Of course, we recognize that your tax situation can change from year to year.

  10. Will this advance payment raise my taxes for 2003?

    No - it's part of the tax cut the new law gives you for 2003. Keep the notice the IRS sends you for your tax records. You will need your advance payment amount to figure the child tax credit on your 2003 return.

  11. I'm eligible but I didn't receive my check. What should I do?

    If you do not receive an advance payment check, you will still be entitled to up to an additional $400 per qualifying child if you claim the Child Tax Credit on your 2003 tax return. Either way - through the advance payment or through claiming the credit on your return - you will receive the benefit of the credit's increase from a maximum of $600 to $1,000 per child.

  12. If I receive the advance Child Tax Credit payment will I get a smaller refund than last year?

    Assuming your income and number of qualifying children remain the same, your 2003 refund shouldn't be smaller than your 2002 refund because of your advance payment. That's because the advance payment is the same amount as the increase in the value of the credit. The law simply gives you this increase now, rather than having you wait until next year for a bigger refund. When you figure the Child Tax Credit on your 2003 return, you will subtract the amount of your advance payment check from the $1,000-per-child total, generally leaving you with the same $600-per-child credit that you had in 2002.

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Upcoming Tax Dates

February 2 Individuals who must make estimated tax payments
If you did not pay your last installment of estimated tax by January 15, you may choose (but are not required) to file your income tax return (Form 1040) for 2014 by February 2. Filing your return and paying any tax due by February 2 prevents any penalty for late payment of the last installment. If you cannot file and pay your tax by February 2, file and pay your tax by April 15.

February 2 All Employers
Give your employees their copies of Form W2 for 2014. If an employee agreed to receive Form W2 electronically, have it posted on a website and notify the employee of the posting.

February 2Payers of gambling winnings
If you either paid reportable gambling winnings or withheld income tax from gambling winnings, give the winners their copies of Form W2G.

February 2 Nonpayroll taxes
File Form 945 to report income tax withheld for 2014 on all nonpayroll items, including backup withholding and withholding on pensions, annuities, IRAs, gambling winnings, and payments of Indian gaming profits to tribal members. Deposit or pay any undeposited tax under the accuracy of deposit rules.

February 2 Social Security, Medicare, and withheld income tax
File Form 941 for the fourth quarter of 2014. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the quarter timely, properly, and in full, you have until February 10 to file the return.

February 2 Certain small employers
File Form 944 to report social security and Medicare taxes and withheld income tax for 2014. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is $2,500 or more for 2014 but less than $2,500 for the fourth quarter, deposit any undeposited tax or pay it in full with a timely filed return. If you deposited the tax for the year timely, properly, and in full, you have until February 10 to file the return.

February 2 Farm employers
File Form 943 to report social security and Medicare taxes and withheld income tax for 2014. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the year timely, properly, and in full, you have until February 10 to file the return.

February 2 Federal unemployment tax
File Form 940 for 2014. If your undeposited tax is $500 r less, you can either pay it with your return or deposit it. If it is more than $500, you must deposit it. However, if you deposited the tax for the year timely, properly, and in full, you have until February 10 to file the return.

February 2All businesses
Give annual information statements to recipients of certain payments you made during 2014 - Details

February 2Form 720 taxes
File Form 720 for the fourth quarter of 2014.

February 2 Wagering tax
File Form 730 and pay the tax on wagers accepted during December 2014.

February 2Heavy highway vehicle use tax
File Form 2290 and pay the tax for vehicles first used in December 2014.

February 10Nonpayroll taxes
File Form 945 to report income tax withheld for 2014 on all nonpayroll items. This due date applies only if you deposited the tax for the year timely, properly, and in full.

February 10Social security, Medicare, and withheld income tax
File Form 941 for the fourth quarter of 2014. This due date applies only if you deposited the tax for the quarter timely, properly, and in full.

February 10Certain small employers
File Form 944 to report social security and Medicare taxes and withheld income tax for 2014. This due date applies only if you deposited the tax for the year timely, properly, and in full.

February 10Farm employers
File Form 943 to report social security and Medicare taxes and withheld income tax for 2014. This due date applies only if you deposited the tax for the year timely, properly, and in full.

February 10Federal unemployment tax
File Form 940 for 2014. This due date applies only if you deposited the tax for the year timely, properly, and in full.

February 10Employees who work for tips
If you received $20 or more in tips during January, report them to your employer - Details

February 11Communications and air transportation taxes under the alternative method
Deposit the tax included in amounts billed or tickets sold during the first 15 days of January.

February 13Regular method taxes
Deposit the tax for the last 16 days of January.

February 17Everyone
Federal Holiday (Washington's Birthday) - Details

February 17Individuals
If you claimed exemption from income tax withholding last year on the Form W-4, you must file a new Form W-4 by this date to continue your exemption for another year - Details

February 17All businesses
Give annual information statements to recipients of certain payments you made during 2014 - Details

February 17Publication 509 (2015)
All payments reported on Form 1099S, Proceeds From Real Estate Transactions. Substitute payments reported in box 8 or gross proceeds paid to an attorney reported in box 14 of Form 1099MISC.

February 17Social security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in January.

February 17Nonpayroll withholding
If the monthly deposit rule applies, deposit the tax for payments in January.

February 18All employers
Begin withholding income tax from the pay of any employee who claimed exemption from withholding in 2014, but did not give you Form W4 to continue the exemption this year.

February 25Communications and air transportation taxes under the alternative method
Deposit the tax included in amounts billed or tickets sold during the last 16 days of January.

February 27Regular method taxes.
Deposit the tax for the first 15 days of February.

View More Tax Dates