$118 million in tax money goes unclaimed
Are you still waiting for your child tax credit?
It might be one of the almost 116,000 checks that were returned to
the Internal Revenue Service as undeliverable.
The money still can be yours in time for holiday
shopping -- as long as you get in touch with the IRS by Dec. 5.
Last summer's tax-cut
bill increased the amount of this popular tax credit and made
the bigger tax break immediately effective. So that parents wouldn't
have to wait until they file their returns next year, advance payment
of the extra credit amount, as much as $400 for many eligible parents,
started going out in July.
But bad addresses forced the postal service to return
some of the tax windfall to Uncle Sam.
In addition to the child tax credit cash, the IRS
is holding money for taxpayers who also missed their regular income
tax refunds this year because of incorrect mailing data. The total
just waiting to be claimed: around $118 million. The misdirected
child tax credit advances account for more than $50 million; another
92,810 tax refund checks come to more than $66 million, an average
of $722 per check.
If a chunk of this tax change belongs to you, let
the IRS know your correct address by the December deadline or you'll
have to wait until you file your taxes next year to get the money.
"Time is running out to get an advance child
credit check," noted IRS Commissioner Mark W. Everson. "Our
goal is to get this money back in the hands of the people it belongs
to, and we want to get the checks out as soon as possible."
You can check whether you're due a refund or child
tax credit advance, as well as the status of your money, online.
The IRS Web site Where's
My Refund? provides information about refunds and Where's
My Advance Child Tax Credit? has information about the tax credit.
To check either, you'll need to provide your Social
Security number and filing status, such as single or married filing
jointly. For a refund inquiry, you must know the refund amount shown
on your 2002 tax return. To find out about your advance child tax
credit, you'll have to enter the number of exemptions shown on your
When the required information is submitted online,
you should see subsequent Web pages that show the status of the
refund or advance child tax credit check. In many cases, the IRS
says taxpayers also will get instructions to help them resolve problems.
For security purposes, your browser must have the latest encryption
technology. If it doesn't, you'll get an error message.
If you cannot or do not want to upgrade your Web browser,
you can call the IRS toll-free at 1-800-829-1040 to find out your
refund status information. You also can call that number to let
the IRS know your correct address
$400 per child possible, not
The IRS reviewed all tax returns filed earlier this year
to determine just who is eligible for the advance child tax credit
checks and how much they will get.
Where parents filed a joint return, the Social Security
number listed first on the 1040 will be used as the mailing guide.
For separated or divorced parents, the advance credit check went
to the parent who claimed the tax break on last year's return.
The actual amount of advance credit a parent receives
also is determined in part by the filer's total income. If you made
too much money, you didn't get the full tax break.
The credit began phasing out if you made $110,000
and were married and filed a joint return; earned $75,000 and filed
as head of household, single or qualifying widow or widower; or
made $55,000 and filed as a married-filing-separately taxpayer.
And not every parent
got a check.
The money was distributed based upon 2002 filing information.
If your child was born or adopted this year, you must wait until
you file your 2003 return to claim the new, larger credit. Your
actual tax situation will determine your eligibility for the credit
and the amount you're due on your upcoming return.
Low-income eligibility limits
The credit's income restrictions don't just apply to wealthier
parents. Those who make too little are left out in the credit cold.
As part of last-minute legislative maneuvering to
keep the tax bill within budget guidelines, a provision was axed
that would have made the expanded child tax credit available to
workers who do not owe income taxes because they do not earn enough.
The Senate and House have approved separate measures
to reinstate the credit for the 6.5 million low-income workers now
excluded. However, the two bills differ on the distribution of the
credit. The House version also includes additional tax breaks that
many Senators oppose. Lawmakers must reconcile the two bills before
any lower-income taxpayers see benefits.
And even the approved child tax credit increases that
went out (or came back to the IRS) this summer are only temporary.
Previously, the credit was set to gradually increase
until it reached $1,000 in 2010. The new law speeds up that process,
hiking it to $1,000 for both 2003 and 2004 tax years. But if the
law isn't extended after 2004, the amount will decrease slightly
and go back to the earlier phase-in schedule.