Making Work Pay - Part of the 2009 Economic Stimulus Act
IRS News Flash ===>>> for Immediate Release !
IR-2009-13 dated February 21, 2009
WASHINGTON ― The Internal Revenue Service today released new withholding tables that will result in more take-home pay this spring for millions of American workers.
Frequently Asked Questions by Anthony V. Ricci, CPA
Q. How will I take home more?
A. New IRS withholding Tables will decrease your Federal Income tax withheld
Q. When does it start?
A. Immediately, but no later than April 1, 2009
Q. What do Individuals have to do?
A. Nothing, if you want the additional income. But, beware this means you will be paying less through withholding and your tax refund may be smaller or you might owe money when you file your 2009 tax return.
Q. What should I do if I do not want less withholding taken out.
A. File a new form W-4 and have additional withholding.
Q. Does everyone take home more?
A. No, only income below $75,000 for Singles and $150,000 for married couples per year should see the increase in their paycheck.
Q. Is there a phase out?
A. Isn’t there always a phase out? The phase out for single taxpayers is $75,000 and 95,000K and married couples $150,000 and $190,000.
Q. Are we getting a rebate check this summer like last year?
A. No, unlike the economic stimulus payment of last, this one does not offer the rebate.
Q. I keep hearing about this Making Work Pay Credit, what is the credit all about?
A. This is maximum credit that Most Americans will see, and it is administered through a reduction in Federal Income tax withholding. It’s an $800 credit for a married couples and $400 for a singles.
Q. We will see this credit when we file our 2009 and 2010 tax return. (4-15-2010 & 4-15-2011)?
A. Yes, we will see this credit, but it’s already factored into an increased pay check.
Q. How much will I see in my pocket if I earn $42,000?
A. About $17 a week.
We hope this clarifies questions you have with the “Making Work Pay” part of the Stimulus Act.
Back home
More on Economic Stimulus
Tax changes Federal
Tax changes State
|