Tax relief checks are checks sent by the tax authorities to taxpayers as a means to reduce the tax burden. It can also be a refund check received from the tax authority for prepaid taxes. After calculating the tax assessment for the current assessment year or for the previous year, the tax authority sends back the excess tax paid to the taxpayer.
Tax relief checks rose to prominence recently with the passage of the Economic Growth Reconciliation and Tax Relief Act of 2001, arguably the country’s first major tax relief program in two decades. The purpose of this law is to reduce the burden on taxpayers by cashing tax relief checks in advance. The US Treasury Department sent checks for up to $300 for singles or $600 for couples in the summer of 2001, and the process is expected to be gradual over the coming years. Significantly, this tax relief check marks the shift from the old 15 percent tax rate to the new 10 percent tax bracket. The goal here is to give low and middle income families the highest priority with timely disbursement of tax relief checks based on the income tax burden.
The tax relief law also has provisions to ease the tax burden by allowing tuition deductions, student loan interest deductions, and tax benefits from government bonds issued specifically to construct public school buildings. The fact that relief checks are sent as refunds to taxpayers has drawn criticism from various sections of society who believe the money should go directly to education. Also, an important aspect of tax relief checks that have come to light is that these relief checks are not a rebate or refund of past tax overpayments, but a refund advance for future taxes to be filed.
