Making Work Pay Tax Credit (Update)
Many taxpayers may have been eligible for the Making Work Pay Tax Credit,
which was a provision of the American Recovery and Reinvestment Act of 2009.
This credit would allow taxpayers to take home more in their paychecks each pay
period. The IRS wants to remind everyone of the following:
- Credit was available for tax years 2009 and 2010. Equaled 6.2% of a
taxpayers earned income. Maximum credit for a married couple filing a
joint return is $800 and $400 for other taxpayers. This credit would be seen
as an increase in the taxpayers paycheck.
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- Self employed taxpayers may benefit from this credit as well. If
eligible, self employed taxpayers should make adjustments to the upcoming
estimated tax payments for September 2009 and January 2010.
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- If you fall in the following groups you might want to review your tax
withholdings to ensure enough tax is being taken from each pay check:
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Married couples with more than one income
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Individuals with more than one income
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Dependents
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Pensioners
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Social Security recipients who also work
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Works without valid social security numbers
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- Having too little tax withheld could result in smaller refunds or an
unexpected tax due when filing your 2009 tax return
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- Making Work Pay tax credit will phase out or is not available for higher
taxpayers. Phase out begins at $75,000 (Single Filers) and $150,000 (Joint
Return Filers)
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- If you believe your withholding is not correct for your situation, a
quick withholding check may be useful. You may contact our office or use the
IRS withholding calculator found at
www.irs.gov. Once you review the withholding you will need to file a new
W4 with your
employer to make the changes. You may obtain a copy of the W4 form
here or
through your payroll office.
Check out the following short IRS videos for more information:
Making Work Pay -
General
Making Work Pay -
Retired
Making Work Pay -
Married
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