Some who aren't getting tax rebate check can still qualify for

WASHINGTON -- Some taxpayers who didn't qualify for a tax rebate check this summer will still get 2001 tax relief when they file returns next year.

Key members of Congress told the Treasury Department in a letter released Monday that certain dependents, nonresident aliens and others who were excluded from the checks should still benefit from the 2001 installment of the 10-year, $1.35 trillion tax cut.

The letter sought to clarify congressional intent for the Internal Revenue Service, which was uncertain how to proceed in drafting next year's tax forms because of ambiguous language in the legislation.

The $40 billion in tax rebate checks of up to $300 for individuals and $600 for couples reflect an advance payment of the new 10 percent tax rate made effective retroactive to Jan. 1.

The checks were based on 2000 tax data, meaning some people with sufficient taxable income in 2001 wouldn't get one -- for instance, someone claimed as a dependent in 2000 who this year has a new job.

The letter states that Congress intended the 2001 relief to apply to these dependents and to taxpayers who were nonresident aliens in 2000 and had tax liability in 2001. In addition, taxpayers eligible for the refundable $500 child tax credit with sufficient income should also qualify for the relief.

Instead of checks, these taxpayers will get their 2001 tax relief in the form of either a bigger tax refund or a smaller tax bill when they file returns next year.

The letter was signed by House Ways and Means Committee Chairman Bill Thomas, R-Calif.; Senate Finance Committee Chairman Max Baucus, D-Mont.; and Sen. Charles Grassley of Iowa, ranking Republican on the Finance Committee.