How to Take the Making Work Pay tax credit on your return
Working taxpayers can get up to $400 back from the government through the Making Work Pay tax credit. The Making Work Pay tax credit is part of the American Recovery and Reinvestment Act and will be in effect for years 2009 and 2010. Though most W-2 employees already received the credit through decreased withholdings, taxpayers must be sure to include the credit on their tax return in order to benefit from the credit.
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Instructions
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Decide if you are eligible. The credit is 6.2% of your earned income up to $400 ($800 if you are married filing jointly). Earned income includes income you have earned either as an employee or as a self-employed individual.
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Complete schedule M. Schedule M will take you through the calculations to figure your credit.
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Attach schedule M to your 1040, and include the amount of the credit on form 1040, like 63. If you are filing form 1040EZ, take the credit on line 8 and do not file Schedule M.
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Tips & Warnings
The credit is reduced if your AGI is over $75,000 ($150,000 if married filing jointly), if you take the government retiree credit, or you receive a $250 economic recovery payment during 2009.
Those with multiple jobs and those who collect Social Security and also work should review their withholding to be sure that enough taxes are being withheld. Otherwise, the credit may leave them owing money.
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Comments
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Your page is very informative and helpful. However, what about our taxes for 2011? We cannot find a Schedule M on the IRS site to download or fill in for the tax credit. Can you help?
