The Child Credit will be doubled from its present $500 per child to $1,000 per child over the next 10 years, beginning in the 2001 tax year. It is now allowed as a credit against the Alternative Minimum Tax. The existing income level limitations for the credit are unchanged: $110,000 for Married, and $55,000 for Singles.
The scheduled phase-in for the credit is:
- $600 for tax years 2001-2004
- $700 for tax years 2005-2008
- $800 for tax years 2009
- $1,000 for tax years 2010 and beyond.
The credit is only available for children 16 years of age and younger, so many taxpayers with older children will not see the full benefit of this increase.
The Dependent Care Credit rate will increase from 30% to 35%. There is also an increase in the Eligible Dependent Care Expenses from $2,400 to $3,000 for one qualifying dependent and from $4,800 to $6,000 for more than one qualifying dependent.