Taxes 
115
comments

Make Work Pay Stimulus Tax Credit

Email  Print Print  

PaycheckI’ve been getting a lot of emails about what people are calling a 2009 stimulus check, passed by Congress and signed by President Obama last month. People are confused, wondering what the stimulus check is, if it’s a tax credit, who is eligible, etc. It’s a little confusing but I think I can put it all to rest.

Make Work Pay Tax Credit

The Make Work Pay Tax Credit was a law included in the new stimulus package called the American Recovery & Reinvestment Plan and called for a refundable tax credit to workers in 2009 and 2010.

Details:

  • Workers get a tax credit of 6.2% of their earned income, up to $400 for individuals and $800 for couples.
  • Nonresident aliens and individuals claimed as dependents are not eligible.
  • The credit phases out at 2% of income over $150,000 for couples and $75,000 for single filers, with the credit completely eliminated for couples earning more than $190,000 and singles earning more than $95,000.
  • The credit is reduced by any other payments associated with the stimulus package, such as the Social Security benefit of $250.

The credit will come by way of a reduction of paycheck withholdings, meaning your paycheck will be slightly larger than before. It won’t seem like a lot but it’ll be $400 or $800 (or less, based on your income) you didn’t have before! The Tax Policy Center has a little writeup about it, giving it a B+.

One thing to watch out for is how employers implement this. For single filers, you don’t have to worry because your employer knows your complete tax picture. For couples, you may want to work with your HR to determine the proper amounts. If you believe your combined income is in the phaseout region, or above it, be sure to tell your HR representative. If they give you the credit and you aren’t supposed to get it, you will owe taxes, and perhaps penalties, next year, warns MarketWatch.

That’s it! That’s the Make Work Pay Credit and what some people call the new stimulus check!

(Photo: oyf)

{ 115 comments, please add your thoughts now! }

Related Posts


RSS Subscribe Like this article? Get all the latest articles sent to your email for free every day. Enter your email address and click "Subscribe." Your email will only be used for this daily subscription and you can unsubscribe anytime.

115 Responses to “Make Work Pay Stimulus Tax Credit”

  1. Colleen says:

    I just did my taxes and it read that I would have gotten a make work pay credit check directly from the Department of Treasury. I did not get any info. regarding more money in my paycheck and the Federal with holdings changing until the amount of the stimuls was paid back. So, if I claimed it and already got it with knowledge, I will have to pay back with interest?


Please Leave a Reply
Bargaineering Comment Policy


Previous Article: «
Next Article: »
Advertising Disclosure: Bargaineering may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website.
About | Contact Me | Privacy Policy/Your California Privacy Rights | Terms of Use | Press
Copyright © 2014 by www.Bargaineering.com. All rights reserved.