Revised Making Work Pay Credit
The Making Work Pay provision of the American Recovery and Reinvestment Act of 2009 provided a refundable tax credit. It was for up to $400 for working individuals and up to $800 for married taxpayers filing joint returns. It credit has been extended for this year. In 2009 and 2010, most wage earners benefited from larger paychecks as a result of the changes made to the federal income tax withholding tables to implement the Making Work Pay tax credit. To claim the credit, Schedule M must be completed with your 1040 and 1040A return.
The dollar amount of the Making Work Pay credit is reduced by any economic recovery payments. This is a one-time-only tax credit of $250 for Social Security recipients, retired railroad workers, and disabled veterans. Thus a Social Security recipient who is also working would be eligible for a Making Work Pay credit of only $150 (that's $400 minus the $250 economic recovery payment).
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