Tax tip Tuesday: Making work pay tax credit - WDAM-TV 7-News, Weather, Sports-Hattiesburg, MS

Tax tip Tuesday: Making work pay tax credit

HATTIESBURG, MS (WDAM) - During tax filing season there are a number of credits you can claim. One that most tax payers need to report is the making work pay tax credit.

"It's a credit for working individuals whether you're working for someone else, or self-employed," said IRS spokeswoman Dee Stepter.

The credit was part of the 2009 stimulus package and was designed to give workers more take home pay through their checks.

"Around about April of 2009 people should've seen a little change in their paycheck to adjust for that credit," said Stepter.

The credit is available for 2009 and 2010 and it equals 6.2 percent of tax payers' earned income. 

Married couples filing joint returns can receive up to $800 dollars.  Other tax payers can receive up to $400.

Stepter said there can be some confusion on this credit, but it all evens out.

"Most people are thinking that the credit is going to be taken away from them when they file their return; it's just off setting," Stepter said. "You had a reduction in withholdings, but you are also going to show the credit on your return.  That reduction in withholding should offset.

Certain tax payers need to make sure their tax withholding for 2010 is enough.  Married couples with two incomes, individuals with multiple jobs, dependents, pensioners, social security recipients who also work ,and workers without a social security number need to all pay attention.

Having too little tax withheld could mean a smaller refund or it could even mean you owe a little. 

Copyright 2009 WDAM. All rights reserved.

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