Tax Year 2003

  Tax Year Tax Year 2003

Karen Varcoe

Consumer Sciences specialist

UC Cooperative Extension

The federal government has two programs to assist low-income families – the Earned Income Tax Credit and the Child Tax Credit.  These credits can amount to sizeable windfalls for the low-income families we serve.  These are credits, not deductions, and are available even if the taxpayer does not owe any taxes.

Earned Income Tax Credit

The eligibility guidelines for the Earned Income Tax Credit for tax year 2003 are as follows:

 Single parent families with one child who earn less than $29,666 in 2003, or married workers earning less than $30,666, are eligible for a credit of up to $2,547.

Families with two or more children who earn less than $33,692 in 2003, or less than $34,692 for married workers, are eligible for a credit of up to $4,204.

Workers without a qualifying child who earn less than $11,230 in 2003, or less than $12,230 for married workers, are eligible for a credit of up to $382.  Qualifying child status is determined by a combination of relationship, age, and residency. 

·    The child must have lived with the taxpayer in the United States for more than half of the tax year.

·    The child must be under age 19, or under the age of 24 and a full time student, or permanently and totally disabled at any time during the year regardless of age.

·    The child must be the taxpayers’ son, daughter, stepchild, adopted child, foster child, grandchild, or in some situations, a sibling.

EIC Income Eligibility

Maximum amount earner can make, based on marital status and number of children, and still be eligible for the EITC.

Child Tax Credit

Many taxpayers received an advanced Child Tax Credit (CTC) refund this past summer.  These refunds were based on an increase in the maximum CTC amount for 2003 from $600 per child to $1,000 per child.  The IRS sent refunds to families they determined were eligible based on their 2002 tax return.  Any taxpayer who received one of these refunds MUST subtract the amount of the advance refund from the total CTC for which they qualify based on their income and qualifying children in 2003.  Taxpayers who fail to subtract the advance refund amount risk delaying the processing of their tax return if the IRS catches the error, or will have to repay the excess amount to the IRS.  However, according to the IRS, taxpayers who are eligible for a smaller credit in 2003 than they received in advance, or who no longer qualify for the credit, are not required to pay back the advance refund.