$400 or $800 Making Work Pay Tax Credit
Bundled in the 2009 economic stimulus plan is the $400 ($800 for couples) Making Work Pay tax credit that will provide a tax credit in 2009 and 2010 equal to 6.2 percent of your earned income up to a maximum of $400 for individual filers and $800 for couples. Here’s what you need to know.
The $400/$800 Making Work Pay tax credit could take effect as soon as July 1, 2009, meaning workers will begin seeing a decrease in the federal income taxes withheld from each paycheck by about $30 per paycheck every two weeks or $60 for couples. If you are self-employed, you can claim the credit when you file your 2009 taxes next April or reduce each of your 2009 quarterly estimated tax payments by $100.
The credit will phase out by two percent of any income over $150,000 for couples and $75,000 for others. Couples earning more than $190,000 and individuals earning more than $95,000 will not benefit from the credit.
Unlike the 2008 economic stimulus tax rebate checks that were mailed to taxpayers in a lump sum, the government is hoping that offering the $400 Make Work Pay tax credit as a reduction in payroll deductions will encourage taxpayers to spend the credit rather than save the money or use it to pay down debt.
According to some estimates, the Making Work Pay tax credit will cost the U.S. government $116.2 billion over 10 years, making it the largest tax provision in the 2009 stimulus plan.
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Very typical slight of hand by Uncle Sugar for sure. They know now that if they give us a lump sum of money we are going to hang onto it, but if they trickle it into us we will not really see it leave. Just more proof that if a politician is showing you something in his/her right hand you had better be looking at their left hand and behind you at the same time. Screw up their little plan by saving that $13 dollars a week. Stick it in a sock, mason jar, piggy bank……anywhere but back into THEIR economy. At some point these morons are going to have to do like the rest of us and stop spending what they dont have. If we floated bad checks for awhile we would soon have reservations to the Gray Bar Hotel, but when Congress does it they get to vote themselves in a 21% raise. Yeah, that math works for me too. Everyone should be at least 18 on this blog which means you have the right to vote. VOTE these idiots out of office in 2 years and lets start over. Just my 2 cents!
This doesn’t seem like a very significant amount. I doubt people will even notice the difference in their pay checks. It will be the most stealthy $116 billion ever!
Wait! I thought the litmus test for tax relief was anyone making over $250,000 would not get a tax break! Now it’s down to $75,000. Where was I when they changed the numbers????
Could someone please tell me how our “Great Change You Can Count On” President is going to spend $789 BILLION DOLLARS one week and then turn around and say he is going to cut the national debt in half by the end of his term. Now I know I went to a small school in rural Mississippi, but even my math is not that bad. The only way that this President is going to accomplish that, unless the White House comes with a “Harry Potter Wand”, is to raise taxes. Now he can say all day long that he is only going to tax the rich, but hello! there are not enough rich people in the country to tote that load. And Mr. President, who do you think owns all the businesses that create all the jobs???????RICH PEOPLE!!!!!!! This is the biggest bunch of wishwash and nonsense I have ever heard. I almost feel as though I am watching an infommercial when i watch CNN or FoxNews. SPEND YOUR WAY TO WEALTH WITH THE GOVERNMENTS 5 STEP PLAN, the only problem is this ain’t gona cost us $19.95 plus S/H. Wake up people, we are in serious trouble here! Just my two cents.
WOW! $13 DOLLARS A WEEK. Now that will definantly take some of the stress off my sons college bill coming up. I’m sure I can send him to a Division 2 school now. This is an insult to all WORKING AMERICANS. I wonder what the stimulus is for those outsiders who already get tax free and interest free loans (that I can’t get)to open up a hotel or convenient store. Aslap in the face. The only thing $13 dollars a week will stimulate is boiling my blood. I really have to stop now so
WOW! $13 DOLLARS A WEEK. Now that will definantly take some of the stress off my sons college bill coming up. I’m sure I can send him to a Division 2 school now. This is an insult to all WORKING AMERICANS. I wonder what the stimulus is for those outsiders who already get tax free and interest free loans (that I can’t get)to open up a hotel or convenient store. Aslap in the face. The only thing $13 dollars a week will stimulate is boiling my blood. I really have to stop now so
Sorry, my last message was cut short.continued: so I can refrain from ugly words being said. America better wake up and see what these beurocratic BS’ers are doing before it’s tooooooo late!
Last years check sent out went to the pump, the same time the stimulus checks came out the gas went up, they always have a plan, but alot of people cut back on vacations and spending, and they stayed home like we did, to save on gas and many other things of course. Now, this little bit of money there going to put in our checks, please, makes me sick,
I’m going to put it into my daughters 529 college plans, have to more at home to go to college. Its automatic deposit, so I won’t miss it, and most of all THE WON’T GET IT!!!!!! HA HA HA.
The good news is that atleast this credit will be extended under the Obama budget plan. Won’t make a huge difference to my financial life, but something is better than nothing.
I understand they will not withhold an amount of taxes each pay period. Do I have to make up these taxes when I file my return by April 15, 2010? Is this a real tax credit or just a loan from the iRS on the amount not being withheld and I pay those taxes later?
Put the money to good use, buy lottery tickets. If I hit the mega-millions you can rest assured that I will do my part to stimulate the economy.
I have the same question as Bill Welling: we I have to pay the taxes back in 2010? I noticed that the ruling says we have to report the tax break on our 2010 forms. What does that mean?
I’ve heard you can refuse it. I think that’s what I’ll do.
I found out that if both you and your wife work and both claim married on your W-4 the tax tables will lower your withholding by $800 each over the year. But you only get one $800 tax credit at year end. So you may have a nice tax bill come April 15 2010 when you must pay back the second $800. Is this true?
I received $33 extra in my pay today! (I get paid twice a month)…Why is everyone complaining so much? It seems like free money to me!
I also started to receive our “Make it work” credit today, It was only for one week because the pay period only included 1 week of March. We were all a little surprised by this, we thought this wasn’t supposed to happen till later in the spring? Anywhoo I’m so excited to be able to order pizza out this weekend it has been months since we have be able to treat ourselfs.
Jim,
Yes, it does seem like extra money. However, look at the cost of that money. My company has put on a salary freeze because of the state of the economy. Getting a standard raise would have been better than this.
And the future acts that will need to be implemented by the government to get this bigger deficit down.
If the Making work Pay Tax Credit had been the only thing done, it would have been good. But it carries very liitle weight to the rest of the “Stimulus Bill”.
This is a joke. What they are not telling you is that while you may have less withholding from your wages, the tax table(thus the amount of tax due)isn’t going to change. The government is “adjusting” everyone’s W-4 for them and adding one more exemption. You still have to pay the piper.
For all of you complaining about $13 a week being a joke, if you don’t want the money simply give it back. Or better yet, give it to someone who appreciates it. $13 a week to some families may mean eating today. Just think about that and be greatful it’s anything at all.
Let me know next April when you get your tax refund if you’re still so grateful! You’ll be surprised I’m sure. But enjoy it while you can.
Wait. “grateful?” “enjoy it?” “free money?”
Fellow citizens, you might recall that this is YOUR hard earned money being taxed. The government cannot give YOU YOUR money. As much as the federal government wants to cast this as some kind of favor, the reality is that the pork barrel spendings continue. Capitol Hill continues to party with YOUR blood and sweat money.
Oh, and nevermind “fairness”. that word got twisted so many times it won’t recognize itself. Do what’s right. To see the truth thru the spin, apply the golden rule: do onto others what you would want done onto you.
Here’s a little exercise for those of you who are grateful for this free money. Pretend your payroll check was written for your gross amount. Then sit down and write out checks on your bank account to all the different government entities (federal, state, local, etc.)for the taxes on your earnings. Do you still feel the same?
Employers who need to make tax withholding changes should read this article:
http://www.ehow.com/how_4863981_making-work-pay-tax-credit.html
They’ve (government) have made a mess of this! It’s horrible. Here’s how it will go. If you work and are single you’ll have $400 less withheld from your federal taxes (get it in hand) and then on your 2009 tax return you’ll get a $400 credit to offset the reduction in your withholding. No problem there. BUT if you’re married and you both work you will have $600 less withheld AND your spouse will have $600 less withheld; you will have a $800 credit on your return so you will owe Uncle Sam $400! IRS even acknowledges this and states ‘well, you can adjust your W-4 to accomodate for that’. HOw many of you out there are going to know how to do that??? This will cause many who come close to breaking even owe next year. Jean H. Enrolled Agent with IRS
How can some of you be so stupid! Yeah, you think this little $13.00 is the greastest thing since sliced bread, you want to go out and buy pizzas or “think” it’s free money, ha, what a joke. Why in the world would you want to see a little extra money now and then have to pay it all back in one lump sum at the end of the year…?????
Hey Jim -
Why do you think the government is obligated to pay for your kid’s college? Maybe you should have sent him to a college you could actually afford! I’m tired of everyone sending their kids to the most expensive school they can find and then whining about how much it costs!
Yeah Eddie, way to stick it to them by NOT spending any money. We wouldn’t want to help stimulate the economy or anything. By the way, why is it THEIR economy, and not OUR economy?
Most of you on here complaining are idoits. You all are probably the same people who voted for the $@!hole who put the country in this situation. I guess your suggestions would be to continue down the same path. How about this; shut-up and spend the money!