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How Typical American Families Will Benefit
Example #1
Consider a family of four with an income of $40,000 a year. The father is a carpenter who makes $25,000, and the mother works at a local department store and makes $15,000. They have two children, a son who is 14 and a freshman in high school and a daughter enrolled full-time in her first year at a state university. Her tuition is $5,000 a year.
This family benefits from the tax cut in at least two ways. They will receive a child tax credit of $500 for their son, plus a HOPE Scholarship of $1,500 for their daughter. In total, they will receive a $2,000 tax cut.
| Tax Cut | |
| Family of four with two children aged 14 and 18 and $40,000 income: |
|
| Child Tax Credit for 14 year old | $500 |
| HOPE Scholarship for 18 year old | $1,500 |
| Total Tax Cut: | $2,000 |
Example #2
Consider a family of three making $55,000 a year. The father has a degree in accounting and works for a local business in the accounting department. The mother works part-time at the local library. They have one daughter aged 7. The father would like to return to school to prepare for his CPA examination. He is going to attend the local liberal arts college. He has signed up for two courses with total tuition of $4,000.
This family will receive a $500 child tax credit for their daughter and an $800 tuition tax credit to help pay for the father's course work.
| Tax Cut | |
| Family of three with one child aged 7 and $55,000 income: |
|
| Child Tax Credit for 7 year old | $500 |
| Tuition Tax Credit | $800 |
| Total Tax Cut: | $1,300 |
Example #3
Consider a family of three making $80,000 combined. They have a daughter who is 17 years old and is trying to decide where to go to college. She is leaning towards a private liberal arts school. Her parents are staring at tuition payments in excess of $10,000 a year for four school years and wondering how they will pay for it.
This tax cut will help. Their daughter will be eligible for a $1,500 HOPE Scholarship in each of her first two years in college. During her junior and senior years, she will be eligible for a tuition tax credit of $1,000. (because four school years fall across five tax years she will be eligible for another $1,000 in the fifth year).
| Year | Tuition Tax Credits |
| 1998 | $1,500 Hope Scholarship |
| 1999 | $1,500 Hope Scholarship |
| 2000 | $1,000 Tuition Tax Credit |
| 2001 | $1,000 Tuition Tax Credit |
| 2002 | $1,000 Tuition Tax Credit |
| Cumulative Tax Cut to Help Pay for Daughter's Education |
$6,000 |
Example #4
A single mother lives with her six year old daughter in California. She's been working as a bank teller for several years and her pay is now $20,000 a year. Working towards becoming a loan officer, she is taking one course a semester towards a bachelor's degree. Her tuition is $1,000. This family will receive a $500 child tax credit for the daughter and a $200 tuition tax credit.
| Tax Cut | |
| Family of two with one child aged 6 and $20,000 income: |
|
| Child Tax Credit for 6 year old | $500 |
| Tuition Tax Credit | $200 |
| Total Tax Cut: | $700 |