PARSIPPANY, NJ - January 19, 2005 - The tax professionals at Jackson Hewitt are always on the alert for tax saving tips for the current tax year, but this time potential savings have been uncovered not only for the current year, but for the last two tax years as well.

 

Prior year IRS instructions for 2002 and 2003 Form 2441, Child and Dependent Care Expenses, had an error that may have incorrectly reduced a taxpayer's Credit for Child and Dependent Care Expenses for 2002 and 2003. The 2004 instructions allow for inclusion of certain nontaxable earned income, such as parsonage allowance and nontaxable combat pay, when calculating the credit on Form 2441. This nontaxable earned income was not included for 2002 and 2003 according to prior year instructions, resulting in a possibly reduced credit amount.

 

Other tax credits including the Child Tax Credit, Additional Child Tax Credit and Earned Income Tax Credit, may also be affected in varying degrees due to the interrelationship of the credit calculations.

 

Taxpayers with nontaxable earned income in 2002 and 2003 that paid child and dependent care expenses, particularly those with nontaxable military combat pay, should contact the Jackson Hewitt office near them to check their 2002 and 2003 tax returns for a possible refund based on this change. The professionals at Jackson Hewitt can assist you with amending your prior year tax returns whether you, another tax professional, or Jackson Hewitt prepared your original 2002 and 2003 tax returns.