Making Work Pay Tax Credit

What is the Making Work Pay Tax Credit?

In 2009 and 2010, the American Recovery and Reinvestment Act of 2009 instituted the Making Work Pay provision which formally provided a refundable tax credit of up to $4000 for working citizens and up to $800 for married taxpayers who file joint returns. Because the Making Work Pay Tax Credit was included into the withholding tables in 2009 and 2010, the majority of workers benefited from larger paychecks during these taxable years. Although the bulk of taxpayers owed less tax because of this credit, a limited number of people—including those who received small refunds—could, in some situations, owe a small amount rather than securing a refund. If you owe tax because too little was taken out of the paychecks during 2009 or 2010, you may be eligible for special relief on any penalty that may apply.

Claiming the Making Work Pay Tax Credit:

To claim the Making Work Pay Tax Credit, the majority of workers must file Schedule M (the making Work pay Tax Credit (1040A or 1040) with their individual tax return. If you received wages or income from self-employment during the taxable years of 2009 and 2010 you most likely qualify for the Making Work Pay Tax Credit. To receive the credit, fill-out and attach Schedule M with your 2009 or 2010 return.

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