The US Internal Revenue Service recently revealed that dependants will be eligible to share in the new low 10% tax rate on the first $6,000 of taxable income ($12,000 for married couples), for 2001, despite the fact that the statutory language of the tax law suggests otherwise.
Although it remains the case that dependants were not eligible to share in the rebate windfall which took place this summer, the House Ways and Means Committee and the Senate Finance Committee have drawn up a letter in which it is explained that despite the way in which the law is worded, dependants will share in the new lower rate for the 2001 tax year, rather than having to wait until 2002.
It is thought that dependants under the age of 14 who are taxed on investment income over $1,500 at their parents' tax rate will also receive a small benefit.
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