Sunday, July 20, 2003

Child-tax windfalls to mail Friday

By Amy Higgins
The Cincinnati Enquirer

Paying for a vacation, replacing some bedroom furniture, splurging on some fun.

That's how some of the 1.9 million advanced federal child tax credit payments being sent to parents in Ohio, Kentucky and Indiana will be spent this summer.

"The kids have had mismatched, not-very-good-quality furniture for quite some time," Christine Klein of Kenwood said.

Klein wants to spend her $800 advanced credit payment on some better furniture for Brady, 10, and Mackenzie, 12.

The government plans to begin mailings Friday, so parents will start seeing the checks, $400 a child, hitting mailboxes next week and into August. Checks will be sent first to taxpayers whose Social Security numbers end with 00-33. Higher last digits will be mailed in August.

The advanced child tax credit payment is thanks to the most recent tax cut, which included raising the child credit from $600 to $1,000 for tax year 2003. But instead of making parents wait until they file this year's taxes in 2004, the IRS is sending 25 million U.S. taxpayers the $400 difference this summer.

"The only thing the taxpayer needs to do is cash the check," IRS Commissioner Mark W. Everson said in a statement. "If you qualify, we will send you a notice. There's no need to call, no need to apply, no need to fill out another form. The IRS will do all the work. A few days after the notice, you will get the check."

The IRS says that qualifying parents are those who claimed a child born after 1986 on their 2002 tax returns.

Parents who did not have a child in 2002, but had one in 2003, would not receive an advance payment but will qualify for the full $1,000 credit on the 2003 tax return.

But those getting the money now, like Wendy Jordan-Cook of Silverton, are hoping to have some summer fun.

Jordan-Cook expects her family to get $1,200 for their three children and is thinking of maybe taking the kids to Gatlinburg, Tenn.

"It's something for the kids, so I'd want to spend it on them," she said.

And spending is exactly what many are hoping will happen to the billions being sent out.

Putting billions in the hands of consumers now may help bolster a still-struggling economy.

Some retailers are hoping to benefit from the tax windfall by offering to cash rebate checks in hopes that consumers will spend some of the money in their stores.

Wal-Mart and Lowe's Home Improvement Warehouse, for example, have offered to cash checks with no purchase required. They were among the retailers that aggressively pursued shoppers during the last round of federal tax rebates in 2001.

Staff writer Randy Tucker contributed.


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