As part of my money management coaching sessions I am educating clients about how the Making Work Pay Tax Credit works and how they can utilize this extra money each month to reach specific financial goals. While providing this basic information, it is important not to step out of our field of expertise, so when mentioning this to clients, any specific questions should be directed to an employer or a tax professional.
Here is the basic overview I share with clients along with two links which provide more background information: The Making Work Pay Tax Credit is a provision of the American Recovery and Reinvestment Act of 2009 which is in effect through tax years 2009 and 2010. You may be eligible for this credit and it could be reflected as a new withholding on your next paycheck. An article released by CNN on March 31, 2009 stated, “Just how much extra cash you will see depends on your marital status, your salary and how many allowances — or exemptions — you normally take. As a rough guide, singles eligible for the credit might get between $10 to $15 per paycheck if paid weekly; for those married filing jointly; they’re likely to see an extra $15 to $20.” This will provide a refundable tax credit of up to $400 for working individuals and $800 for married taxpayers filing joint returns.
Talk to your employer to see if you are eligible and if this has been implemented at your place of employment. There are important details regarding this tax credit, for instance you may receive more than you are entitled to and would be required to pay it back. I encourage you to consult your local tax professional with any specific questions. Take a look at your paycheck to see how much extra you may be receiving and make that money work for you!
For detailed information see the following links:
IRS LINK http://www.irs.gov/newsroom/article/0,,id=204521,00.html
CNN MONEY ARTICLE LINK http://money.cnn.com/2009/03/31/pf/taxes/making_work_pay_credit/index.htm?postversion=2009033111
Kelli Jo Anthon, AFC
Belvoir Federal Credit Union