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2001
Advance Payment Amount
The 2001 advance payment amount is
a maximum of $300 for a single taxpayer, $500 for a head of
household, and $600 for a married couple filing a joint return. Most
taxpayers will get the full amount as an advance payment this year;
some will have it split between this year and next; and some may get
all of it as a credit on the 2001 tax return.
This year's advance payment will be
five percent of the taxable income shown on the 2000 tax return,
subject to the limits described above. This income amount is on:
| Form 1040 - line
39 |
Form 1040EZ - line
6 |
| Form 1040A - line
25 |
TeleFile Tax
Record - line K |
However, the payment cannot be more
than the person's tax liability minus any nonrefundable credits.
This amount is on:
| Form 1040 - line
51 |
Form 1040EZ - line
10 |
| Form 1040A - line
33 |
TeleFile Tax
Record - line K |
If a taxpayer's advance payment is
less than the maximum dollar amount for his or her filing status,
that person may be able to claim a credit on the 2001 return, up to
the difference between the allowable amount and the payment already
received.
Example 1.
You are single, not able to be claimed as a dependent by anyone, had
a 2000 taxable income of $4,000 and claimed no tax credits. You
would receive an advance payment of $200 this year - 5 percent of
$4,000. If your taxable income for 2001 rises to at least $6,000,
you could claim an additional credit of $100 next year ($300 total
credit, minus $200 paid in 2001).
Example 2.
You and your spouse file jointly and have two children who qualify
for the child tax credit. Your 2000 taxable income was $45,000 and
your tax liability was $5,907 after subtracting a child tax credit
of $1,000. Five percent of $45,000 is $2,250, so your advance
payment is limited to the $600 maximum. Since this is less than your
tax liability, you will receive your full 2001 credit as an advance
payment this year.
Example 3.
You are a head of household with taxable income of $9,350 for 2000.
You claimed a $500 child tax credit and a $556 child care credit for
one qualifying child, leaving you a tax liability of $350. You also
claimed an earned income tax credit (EITC) of $957, but this
refundable credit does not affect the 2001 credit calculation. Five
percent of $9,350 is $468, which is $118 more than your tax
liability, so your refund is limited to $350, the amount of your tax
liability. If your taxable income for 2001 rises to at least $10,000
and your tax liability rises to at least $500, you would be able to
claim an additional credit of $150 on your 2001 return.
The advance payment will be reduced
because of any outstanding government debt, such as back taxes, or a
student loan, or because of past-due child support obligations. In
such a case, the IRS will send the person an explanation of the
offset. If the advance payment amount is larger than the debt, the
taxpayer will get a check for the difference. If the full advance
payment is applied to the debt, the taxpayer will not receive any
check.
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How Much Money
Will I Get?
| IF your filing
status on your 2000 return is
|
AND the
taxable income on your 2000 return is*
|
THEN your
advance refund will be as shown below, UNLESS the tax liability
on your 2000 return is less than the amount on the table**
|
| Single or Married
filing Separately |
less than $6,000
______________
$6,000 or more |
5% (.05) of your
taxable income
______________
$ 300 |
| Head of household |
less than $10,000
______________
$10,000 or more |
5% (.05) of your
taxable income
______________
$500 |
| Married filing
jointly or Qualifying widow(er) |
less than $12,000
______________
$12,000 or more |
5% (.05) of your
taxable income
______________
$600 |
* Taxable income is the amount
shown on the 2000 Form 1040, line 39; Form 1040A, line 25; Form
1040EZ, line 6; or on the TeleFile Tax Record, line K.
** If you filed Form 1040 or
Form 1040A, your advance credit payment is limited to your tax
liability which is the amount shown on your 2000 Form 1040, line 51,
or Form 1040A, line 33.
***The amount of your advance
refund may be reduced by past due debts you owe for federal or state
taxes or other federal debts.
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Time Frame
For Mailing 2001 Advance Payment Checks
Because any bank account
information provided by the taxpayer when filing the tax return may
no longer be applicable, the Treasury will not send the advance
payments by direct deposit. Nor will taxpayers be able to request
direct deposit of these payments.
It will take the Treasury about
three months to mail checks to those who have already filed their
2000 Federal tax returns. By mid-July, the IRS will send taxpayers a
letter describing the amount of the advance payment check, the week
it will be sent, and the possibility of an offset for an outstanding
debt. Recipients should keep the letter for reference when
completing their 2001 returns. The IRS will also send a letter of
explanation to taxpayers who are not eligible for the payment.
Taxpayers who have moved since
filing their last tax return should receive the IRS letter and the
check if they have filed a change of address with the U.S. Postal
Service or the IRS. Under procedures instituted earlier this year,
the IRS uses the Postal Service's National Change of Address
database to update its own taxpayer address files weekly. Taxpayers
may also notify the IRS directly by filing Form 8822, "Change of
Address."
Generally, the last two digits of
the taxpayer's social security number will determine when the checks
are mailed, so a person may get a check at a different time than a
neighbor or even other family members.
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When
Will I Get My Advance Payment?
If
the last two digits of your Social Security number are:
_____________________ |
You
should receive your refund the week of:
________________________ |
| 00
- 09 |
July 23 |
| 10
- 19 |
July 30 |
| 20
- 29 |
August 6 |
| 30
- 39 |
August 13 |
| 40
- 49 |
August 20 |
| 50
- 59 |
August 27 |
| 60
- 69 |
September 3 |
| 70
- 79 |
September 10 |
| 80
- 89 |
September 17 |
| 90
- 99 |
September 24 |
For married taxpayers who filed a
joint return, the first Social Security number on the return will
determine the mailing date for the advance payment check.
Taxpayers may check the IRS Web
site for the general advance payment mailout schedule. By the end of
June, the IRS TeleTax system - at 1-800-829-4477 - will have
recorded information on the mailout schedule and the steps for
figuring the advance payment amount.
Those who have not yet filed a tax
return for 2000 will not get any 2001 advance payment check until
the IRS processes the 2000 tax return. The sooner taxpayers file
their returns, the sooner they will receive any advance payment to
which they are entitled. These taxpayers should not make any changes
or adjustments to the 2000 tax return because of an expected advance
payment. If they fail to fully pay any balance due to reflect an
expected payment, they will owe interest and a late payment penalty
on that 2000 balance due.
The law states that Treasury may
not send out any advance payments after December. Taxpayers who do
not file their 2000 tax returns in time for an advance payment this
year may claim a credit, to the extent they qualify for it, on their
2001 tax returns.
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This information is adapted from
"2001 Advance Payments Information" published by the Internal
Revenue Service
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