Making Work Pay Credit
Malibu Tax Preparation Free Tax Articles
For 2009 and 2010, we have the new “Making Work Pay” credit which the Obama administration says will cut taxes for more than 95% of working families in the United States. It provides a refundable credit of 6.2% of a taxpayer’s earned income not to exceed $400 for individuals and $800 for joint filing couples. This credit phases out at the rate of 2% of modified AGI, starting at $75,000 for individuals and $150,000 for joint filers. It is fully phased out at $95,000 for individuals and $190,000 for joint filers. Taxpayers can receive this benefit through a reduction in the amount of income tax that is withheld from their paychecks, or through claiming the credit on their tax returns.
