Makaing Work Pay Tax Credit

This tax credit is reflected in an automatic adjustment in the revised 2009 withholding tables found in Publication 15-T.

The IRS has advised that individuals and couples with multiple jobs may want to submit revised W-4 forms to ensure adequate withholding to cover the tax for the combined income. This would also be the case for taxpayers with AGI falling within or above the credit phase-out range. The credit phases-out for individuals with modified adjusted gross income between $75,000 and $95,000 and for married couples filing jointly with modified AGI between $150,000 and $190,000.

The refundable credit is available for 2009 and 2010. It is equal to the lesser of 6.2 percent of the taxpayer's earned income or $400 ($800 for married couples filing a joint return). The credit is equivalent to a single employee's share of social security tax on about the first $6,450 of wages.

John R. Dundon, EA - www.1040.com/jd - Taxpayer Advocate - Enrolled with the United States Department of Treasury to Practice before the IRS - Under contract with the United States Department of Treasury as a Certified ITIN Acceptance Agent - Direct phone # 720-234-1177