by Loella Haskew, CPA
I recently received my child tax refund check. Will I have to declare it as income on my 2003 taxes?
The 2003 federal tax law increased the child tax credit from $600 per qualifying child to $1,000. This is effective for years starting in 2003. If you received the advanced portion ($400) of the credit for 2003, your child had to have been born between 1987 and 2002, and you claimed a credit on your 2002 federal taxes. So the direct answer to your question is no, you do not have to report the $400 refund as income. But you will have to reduce the child tax credit when you calculate your 2003 tax liability by the amount you received for the advance payment.
Some taxpayers who are eligible for the refund may not have received it. Generally, these are people who either had children born in 2003, filed their 2002 taxes late, or did not claim eligible children on their 2002 taxes. Nevertheless, these taxpayers will be able to take the full $1,000 child tax credit when they file their returns next April.
Loella Haskew is a Walnut Creek, Calif., CPA with the firm of Buckley Patchen Riemann & Hall. You can reach her at (925) 937-2727.
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