It's an advance refund.Byline: The Register-Guard
The Treasury Department checks are arriving just in time to buy new school clothes for those little tax breaks that have been underfoot all summer. Go ahead, spend the money - that's what Congress and President Bush were counting on when they passed tax cut legislation earlier this year. The 25 million Americans who are receiving payments of up to $400 per child will be glad for the money, but they and the country would have been better off if it had been distributed more widely and in a simpler way.
The money is not a gift. It's it's
1. Contraction of it is.
2. Contraction of it has. See Usage Note at its.
it's it is or it has
it's be ~have an advance refund TO REFUND. To pay back by the party who has received it, to the party who has paid it, money which ought not to have been paid.
2. On a deficiency of assets, executors and administrators cum testamento annexo, are entitled to have refunded to them legacies of taxes being paid in 2003. The Jobs and Growth Tax Relief and Reconciliation Act increased the child tax credit to $1,000 from its previous level of $600. The government is sending the difference to qualifying taxpayers now rather than having people wait until they file their income tax forms next April. Because there are five months remaining in the year, nearly half of the refund is based on taxes that people haven't have·n't
Contraction of have not.
haven't have not
haven't have even paid yet.
The child credit is the primary tax benefit provided to parents. It's a credit, not a deduction deduction, in logic, form of inference such that the conclusion must be true if the premises are true. For example, if we know that all men have two legs and that John is a man, it is then logical to deduce that John has two legs. - each child reduces the amount of tax due by $1,000. The increase in the credit was initially approved in the tax-cut legislation of 2001, but it was intended to phase in gradually. This year's tax-cut bill raised the credit to $1,000 in 2003 and '04.
Without further legislation, the credit will revert re·vert
1. To return to a former condition, practice, subject, or belief.
2. To undergo genetic reversion. to the phase-in phase-in
A gradual introduction: a phase-in of new personal policies. schedule of the earlier legislation after next year - $700 in 2005-08, $800 in 2009, and back up to $1,000 in 2010. By approving only a two-year speed-up of the increase in the child tax credit, Congress and the president kept the price tag of the tax cut bill down. Next year's elections will be over by the time lawmakers are forced to confront the choice between allowing the tax credit to shrink shrink Vox populi noun A psychiatrist to $700, or keeping it at $1,000 and adding to already swollen budget deficits.
The 2001 tax cut not only set in motion an increase of the child tax credit, it also expanded the credit's refundability. A refundable credit Refundable Credit
A tax credit that is not limited by the amount of an individual's tax liability. Typically a tax credit only reduces an individual's tax liability to zero. Refundable credits go beyond this and so really can be considered the same as a payment. is one that is paid even to people who owe little or no income tax. Refundability makes the child tax credit valuable to low-income parents. This year's law made the tax credit bigger, without accelerating the scheduled increase in its refundability. As a result, low-income families - mostly those with incomes below $25,000 a year - receive no benefit from the increase in the child credit.
Here's how the refundable credit works. The 2001 tax cut made the child credit refundable Refundable
Eligible for refunding under the terms of a bond indenture. for 10 percent of income above $10,000, up to the maximum amount of the credit. For a family with an income of $22,000, for instance, the child tax credit is refundable up to an amount of $1,200 - 10 percent of the amount over $10,000. If the family has two children, the maximum refundable amount is $600 per child. For this family, increasing the credit to $1,000 has no effect.
The 2001 law changes the refundability formula to 15 percent of income above $10,000 in 2005 and beyond. Under this formula, the two-child family with an income of $22,000 could expect a refundable credit of $900 per child, and would now be receiving an advance refund of $600. But this year's tax-cut legislation left the formula at 10 percent for both 2003 and '04. Accelerating the increase in refundability would have cost the Treasury $3.5 billion, or 1 percent of the cost of the entire tax cut.
The few defenders of the failure to increase the refundability formula in tandem Adv. 1. in tandem - one behind the other; "ride tandem on a bicycle built for two"; "riding horses down the path in tandem"
tandem with the child credit argue that people who don't pay taxes don't deserve tax refunds Tax refund
Money back from the government when too much tax has been paid or withheld from a salary. . If that's the case, the 2001 tax cut should not have scheduled an increase in the refundability formula for 2005. And if the purpose of this year's tax cut is to create jobs and economic growth, as its title indicates, putting money in the hands of low-income people, who are most likely to spend it, makes more sense than cutting the tax on stock dividends. Instead, $150 billion of the $350 billion tax cut results from a reduction in taxes on dividends, while low-income people are frozen out of a refundable child credit for the two years the $1,000 credit is in effect.
Congress has been unable to agree on an amendment that would accelerate the refundability schedule, mainly because Republicans have insisted on tying it to still more tax cuts. If Congress and the president were intent on returning money to taxpayers, an ordinary rebate rebate, partial refund of the total price paid for goods or services. In the United States, rebates were historically given by railroads to favored shippers as a return on transportation charges. paid to everyone would have been easier to understand, better for the economy and more helpful to Americans most in need of a check from the Treasury.