| The Making Work Pay Credit is an economic stimulus | | | | Who May Have Received Excess Making Work Pay |
| provision of the American Recovery and | | | | Credit Amounts? |
| Reinvestment Act that took effect in April 2009. The | | | | Taxpayers that fall into any of the following categories |
| purpose of the credit, which is in force for both 2009 | | | | may end up owing money back to the IRS or seeing a |
| and 2010 tax years, is to provide up to an additional | | | | reduced refund amount because of excessive credits |
| $400 per year to working individuals and $800 per | | | | in their paycheck:o Single workers with more than one |
| year to working married couples through a reduction in | | | | job.o Joint filers with multiple jobs.o Individuals who file |
| withholding taxes. For most workers, this has resulted | | | | with an Individual Taxpayer Identification Number. |
| in a small increase in their take-home pay which is | | | | According to the Treasury Inspector General for Tax |
| intended to increase spending and stimulate the | | | | Administration, more than 15.4 million taxpayers may |
| economy. | | | | need to pay back some or all of their advance credits |
| The amount of the credit will be calculated on each | | | | or even be assessed an estimated tax penalty as a |
| taxpayer's 2009 income tax return. However, certain | | | | direct result of the Making Work Pay Credit. |
| working individuals are not eligible for this credit but | | | | What Can Taxpayers Do About Making Work Pay |
| may have seen a reduction in their withholding | | | | Credit Overpayments? |
| anyway. This may result in an overpayment of the | | | | If you've received excessive Making Work Pay Credit |
| Making Work Pay Credit and cause either a reduced | | | | advances, there isn't much that can be done to |
| income tax refund or taxes due to the IRS. | | | | alleviate your tax burden for 2009. Using an e-file site, |
| Who Doesn't Qualify for the Making Work Pay Credit? | | | | like to prepare and file your taxes online will help you |
| Some taxpayers who are not eligible for the Making | | | | spot any overpayments and assist you in getting the |
| Work Pay Credit include:o Individual taxpayers with an | | | | maximum deductions available in order to reduce your |
| Adjusted Gross Income (AGI) of $95,000 or more and | | | | taxes. This will also give you a good idea of what |
| married couples filing jointly with an AGI of $190,000 or | | | | amount you should be withholding from your pay in |
| more.o Anyone who can be claimed as a dependent | | | | order to avoid a similar situation next year. |
| on someone else's taxes. | | | | For the 2010 tax year, workers can make adjustments |
| Even if you're not on this list, you may have | | | | to their withholding now to account for the Making |
| inadvertently received more than your share of the | | | | Work Pay Credit. When you have determined your |
| credit in your pay, since employers are required to use | | | | correct withholding amount, any adjustments can be |
| the same withholding tables for all workers. This may | | | | made by filing a revised Form W-4, Employee's |
| mean you owe that money back to the IRS on your | | | | Withholding Allowance Certificate, with your employer. |
| personal income taxes. | | | | |