My Personal Finance Journey

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No $400 Advance Child Tax Credit This Year

Contributed by mm | August 9, 2004 7:19 AM PST

Are you still waiting for the $400-per-child advance child tax credit check from the government this summer? There will be none. For whatever reasons, the lawmakers cannot pass another law to support one more year of such advance. It's a little bizarre considering it is an election year, but this is the hard truth. For this reason, businesses are expecting a less heated summer, and the government is expecting the largest tax refund next year.

Actually it is not bad news, at least not for this year. Each child still entitles you to $1,000 tax credit when you file your 2004 tax return early next year, and if you act proactively to twist your withholdings (assuming you are still working and have job income), you can essentially cut yourself the $400 check.

The real bad news is: if no more law is inked, the child tax credit will decline starting in tax year 2005, until return back to the $1,000-per-child level in 2010. The detailed schedule is:

2003 and 2004: $1,000
2005 thru 2008: $700
2009: $800
2010: $1,000

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