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.
