The following are some of the tax changes for 2002. For information on other changes, see Publication 553, Highlights of 2001 Tax Changes.

New tax credit for employer provided child-care facilities. For tax years beginning after 2001, you can receive a tax credit of 25% of the qualified expenses you paid for employee child care and 10% of qualified expenses you paid for child care resource and referral services. This credit is limited to $150,000 each year. For more information, see Publication 553.

New tax credit for small business pension plan startup costs. For tax years beginning after 2001, if you begin a new qualified defined benefit or defined contribution plan (including a 401(k) plan), SIMPLE plan, or simplified employee pension, you can receive a tax credit of 50% of the first $1,000 of qualified startup costs. For more information, see Publication 553.

Health insurance deduction for the self-employed. For 2002, this deduction is 70% of the amount you paid for medical insurance for yourself and your family. For more information, see Insurance in chapter 8.

Self-employment tax. The maximum net self-employment earnings subject to the social security part of the self-employment tax increases to $84,900 for 2002.

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