Summary of Income Tax Law Changes

Starting in 2002 there will be a new 10% bracket. This applies to the first $6,000 for singles, $10,000 for head of household, and $12,000 for married couples.

The remaining brackets are reduced as follows:

2001	27.5%	30.5%	35.5%	39.1%
2002-03	27%	30%	35%	38.6%
2004-05	26%	29%	34%	37.6%
2006	25%	28%	33%	35%

The Alternative Minimum Tax Exemption has been increased with a sunset provision that will return it to current levels in 2005. The increase in the exemption is approx. 9% for married couples and 6% for singles. The upper income limit where the exemption is eliminated has also been increase.

The credit allowed for each child (under 17) that a taxpayer can claim as a dependent is increased as follows:

2001-04	$ 600
2005-08	$ 700
2009	$ 800
2010	$1,000

Also, this credit is now (in certain situations) a refundable credit. It may also be applied against the AMT.

The adoption credit is increased and made permanent.

Dependent care credit: The maximum amount eligible for calculation of the credit is increased and the phase down calculation changed.