Most employees are seeing or are going to see a bit more on their paychecks no later than the April 1, 2009, payroll period. Due to the Making Work Pay Credit, a provision of the American Recovery and Reinvestment Act of 2009, most employees will see an increase in their paychecks between $8.00 and $13.00 per week.
“For most taxpayers, the additional credit will automatically start showing up in their paychecks this spring,” said IRS Commissioner Doug Shulman. Employees don’t have to complete new W-4 forms for the credit to be applied, either. The amount of the credit must be reported on the employee’s 2009 tax return in 2010, however. Taxpayers who do not have taxes withheld by an employer during the year can also claim the credit on their 2009 tax return.
There is one stipulation to all of this: single individuals can benefit up to $400.00 for 2009 while married couples filing a joint tax return can be awarded up to $800.00. Additionally, the credit is phased out for married couples filing joint returns whose modified adjusted gross income (AGI) is between $150,000 and $190,000 and other taxpayers whose modified AGI is between $75,000 and $95,000.
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