DCL-03-20, Advanced Child Tax Credit

DEAR COLLEAGUE LETTER

DCL-03-20

DATE: July 22, 2003

TO: ALL STATE IV-D DIRECTORS

RE: Advanced Child Tax Credit

Dear Colleague:

The recent passage of the Jobs and Growth Tax Relief Reconciliation Act of 2003 has spurred much interest in the Child Support Enforcement community. A part of this Act increases the maximum Child Tax Credit for 2003 to $1,000 per child, up from $600 for tax year 2002. The law further provides for immediate tax relief by directing the Department of Treasury to provide the difference – up to $400 per child – as an advance payment to each eligible taxpayer this summer. The Department of Treasury will issue approximately 25 million checks this year, beginning with three principal mailings on July 25, August 1, and August 8. It is important to point out the difference between this round of payments and the tax rebates sent out during the summer of 2001. The Economic Growth and Tax Relief Reconciliation Act of 2001 included provisions for a tax rebate payment to be mailed out to taxpayers who filed a tax return for the prior tax year. This year's rebate payments will only be sent to taxpayers who claimed the Child Tax Credit on their 2002 tax return.

Although offsets will not officially be processed by the Federal Offset System until August 4 (during OCSE Cycle 2003-14), we have received preliminary collection figures from Treasury. From the first round of checks dated July 25, we will receive approximately 80,000 offsets for a combined total of over $39,000,000. These numbers are nationwide estimates, with state-by-state data unavailable at this time.

If you have any questions, please call Roy Nix, Chief, Federal Collections at (202) 401-5685, or contact the Special Collections Unit at (202) 401-9389.

Sincerely,

Sherri Z. Heller, Ed.D.
Commissioner
Office of Child Support Enforcement

cc: State IV-D Directors
Regional Program Managers
ACF Regional Administrators