Tip of the Week: The Whole Credit (12/27/99)

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	The Whole Credit Financial Tip of the Week by Deloitte & Touche OnLine December 27, 1999

A few dollars saved: The child tax credit got bigger in 1999.

See our archive of previous tips on your money, your taxes and your financial plan.

The tax credit available for each dependent child (including stepchildren and eligible foster children) who is under the age of 17 at the end of the taxable year is increased from $400 to $500 in 1999. The child credit generally is available only to the extent of a taxpayer’s regular income tax liability. However, for a taxpayer with three or more children, this limitation is increased by the excess of Social Security taxes paid over the sum of other nonrefundable credits and any earned income tax credit allowed to the taxpayer.

The child credit is reduced and eventually eliminated as family income increases from $110,000 to $120,000. Taxpayers filing joint returns will lose $50 of the credit for every $1,000 (or part thereof) of adjusted gross income (AGI) in excess of $110,000. For other taxpayers, the credit begins to phase out at an AGI of $75,000. The child credit and the income threshold amounts are not indexed for inflation.

For more on your taxes, see our 1999 Tax Planning Guide.