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As part of the stimulus package passed in February, President Obama called for all employers to adjust their payroll systems by tomorrow so employees would begin receiving the new “Making Work Pay” tax credit in their paychecks.
The credit is available for 2009 and 2010. For 2009 and 2010, the Making Work Pay provision of the American Recovery and Reinvestment Act will provide a refundable tax credit of up to $400 for working individuals and $800 for married taxpayers filing joint returns, according to the Internal Revenue Service.
This tax credit will be calculated at a rate of 6.2 percent of earned income and will phase out for taxpayers with adjusted gross income in excess of $75,000, or $150,000 for .married couples filing jointly.
For more information about the Making Work Paym check out Publication 15-T, New Wage Withholding and Advance Earned Income Credit Payment Tables (for Wages Paid Through 2009).