The Family Tax Provisions have been extended.
- Child tax credit
Increased to $1,000 per qualifying child.
This keeps the $1,000 level through 2010.
- Marriage penalty relief
Increased standard deduction continues at double the single
rate through 2010.
Increased 15% tax bracket ceiling continues at double the
single rate through 2010.
- 10% rate bracket
The $7,000 (single) and $14,000 (Married filing jointly)
levels continue through 2007 before they decrease back to the
former levels ($6,000-Single, $12,000-MFJ).
- Increase in refundable Child Tax Credit
The scheduled increase in the refundable portion to 15%
(from 10%) was to take place starting in 2005. Now this
starts with 2004 tax returns. The $10,000 base remains at the
Any combat pay excluded from income is considered earned
income for purposes of the refundable child tax credit
effective with years beginning on or after January 1, 2004.
- Alternative Minimum Tax relief
The current provision of a higher exemption amounts scheduled
to end after 2004 is now extended through 2005.
- Earned Income Tax Credit & Combat Pay
The combat pay excluded under §112 is not earned income
under old law. Now the taxpayer can elect to treat excluded
combat pay as earned income starting with years ending in
2004 and 2005 (before January 1, 2006). The process for this
election is not identified in the law, so will be coming from
- Head of Household status
In order to claim HOH status, the taxpayer's home must be the
home of a qualifying child. If the child is married, the
taxpayer has to be able to claim the child in order to
receive HOH status.
- Deduction for Certain Expenses of School Teachers
Retroactively extended to December 31, 2005.