Making Work Pay Tax Credit Explained in Simple Terms

The Making Work Pay tax credit is a refundable tax credit that can help lower-income working individuals and families get back some of the taxes they paid throughout the year.

This tax credit was introduced in 2009 as part of the American Recovery and Reinvestment Act, and it's designed to provide a boost to workers who are struggling to make ends meet.

For tax year 2009, the Making Work Pay tax credit was a maximum of $400 for single filers and $800 for joint filers.

The Making Work Pay tax credit was a personal credit provided to U.S. federal income taxpayers in tax years 2009 and 2010.

It was authorized in the American Recovery and Reinvestment Act of 2009, with the goal of stimulating consumer spending as part of President Barack Obama's stimulus package.

The credit was given at a rate of 6.2 percent of earned income up to a maximum of $400 for individuals or $800 for married taxpayers.

To be eligible, single filers had to make between $8,100 per year and $95,000 per year, while joint filers in the range of $8,100 and $190,000 could claim it annually.

Taxpayers with multiple jobs or self-employed had to adjust withholding to avoid inadvertently receiving multiple credits.

Workers with multiple jobs, or unemployed, had the option to delay receiving the credit and receive instead a lump sum calculated on the tax return filed in the following year.

Reconciling the credit required filing Schedule M with the Form 1040 personal income tax return.

The credit was not extended to tax year 2011, and has not been considered since then.

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The Making Work Pay tax credit was a personal credit provided to U.S. federal income taxpayers in tax years 2009 and 2010. It was authorized in the American Recovery and Reinvestment Act of 2009.

To be eligible for the credit, you had to have earned income from a job or self-employment during those years. You also had to file Schedule M to claim the credit, even if you received it as an income boost in your paycheck.

The credit was calculated based on your earned income, and the amount you could claim varied depending on your filing status. If you filed as married filing jointly and had at least $12,903 of earned income, you could take the full $800 credit.

If you filed as married filing jointly and your modified adjusted gross income (MAGI) was between $150,000 and $190,000, the credit began to phase out. If your MAGI was $190,000 or more, you wouldn't get any credit at all.

Here's a breakdown of the eligibility and calculation rules:

If you earned less than the minimum amount for your filing status, you could claim a credit based on the amount you earned, multiplied by 6.2%.

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You may still be able to claim the Making Work Pay tax credit, even though it's been discontinued. The deadline to amend your return and take advantage of this credit is three years from the due date of your original return, or two years from the date you paid the tax - whichever is later.

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Don't let the expiration of this credit be a lost opportunity. Take the time to review your past tax returns and see if you qualify for a refund.

The Making Work Pay tax credit may be extinct, but it's not impossible to revive it. You just need to file an amended return within the specified timeframe.

2.1 million Maryland families will see an increase in their paychecks starting today, thanks to the Making Work Pay tax credit.

The credit is the result of the federal American Recovery and Reinvestment Act of 2009, and it's estimated to save Maryland families a total of $1.1 billion.

Congressman Steny H. Hoyer (D-MD) stated that the credit is intended to provide relief to middle-class families struggling to make ends meet in the economic recession.

The credit will provide up to $400 dollars per year for working individuals and $800 for married taxpayers.

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Here's a breakdown of the credit:

By April 1, employers must have instituted the lower withholdings for their employees, affecting 95 percent of working families in Maryland.