Five Facts about the Making Work Pay Tax Credit

Working taxpayers may be eligible for the Making Work Pay tax credit, a significant provision of the American Recovery and Reinvestment Act of 2009. This credit means more take-home pay for millions of American workers. Five things you should know:

1.     Available for 2009 and 2010, the credit equals 6.2 percent of a taxpayer's earned income. The maximum credit is $800 for married filing joint and $400 for other taxpayers. Most wage earners have been enjoying a boost in their paychecks from this credit since April.

2.     Eligible self-employed taxpayers can also get the credit, by adjusting their September and January estimated tax payments.

3.     Any of the following should ensure enough tax is being withheld: married couples with two incomes, individuals with multiple jobs, dependents, pensioners, Social Security recipients who also work, and workers without valid Social Security numbers. Having too little tax withheld could result in a smaller refund or a balance due rather than an expected refund.

4.     The Making Work Pay credit phases out beginning at $75,000 for single taxpayers and $150,000 for married filing joint.