Making Work Pay is a new tax credit as part of the American Recovery and Reinvestment Act of 2009. It will give taxpayers a refundable tax credit of up to $400 for single taxpayers and $800 for married taxpayers filing joint returns. The credit is available in 2009 and 2010. Employers will make the necessary adjustments through payroll withholding. Employees will notice a bit more money in their take home pay. The changes should begin this spring. The amount of the credit will be reported on the 2009 tax returns filed in 2010.
The self-employed should not feel left out of the loop. Making Work Pay also impacts self employed individuals. If you are self-employed, you too can take the credit on your 2009 tax return. A good practice for the self employed is to evaluate your estimated tax payments to see if adjustments should be made.
For more information, visit the IRS website at www.irs.gov.