Details on the "Making Work Pay" Tax Credit

American Recovery and Reinvestment Tax Act of 2009
Chairman Charles Rangel (D-NY) of the House Committee on Ways and Means has released details of the tax breaks and other benefits. This will be formally introduced within the next few days. Read what Chairman Rangel said about the benefits involved:

"The critical state of our economy calls for swift, comprehensive action and this package will provide relief to all communities and all sectors of the American economy. This recovery package will provide tremendous tax relief, health care and job training benefits for families struggling to make ends meet, while also giving businesses the boost they need to create new jobs. We have also designed specific provisions to help State and local governments fund critical infrastructure projects to improve our roads, schools, bridges and airports, while also maintaining and creating good-paying jobs for working families. This package was developed with strong coordination between the House and Senate leaders, President-elect Obama and his economic team. I look forward to working with all parties involved toward a swift passage."

The Specifics
You can download the 6 page Summary [PDF] or read the full text 328 page version if you are fluent in legalese. Download the full version here [PDF]. A portion of the tax relief summary is below:

TAX RELIEF INCLUDED IN "THE AMERICAN RECOVERY AND REINVESTMENT PLAN"
Summary: The tax provisions included in "The American Recovery and Reinvestment Plan" will provide approximately $275 billion in tax relief for individuals, businesses, and State and local governments.
Making Work Pay" tax credit. The bill would cut taxes for more than 95% of working families in the United States. For 2009 and 2010, the bill would provide a refundable tax credit of up to $500 for working individuals and $1,000 for working families. This tax credit would be calculated at a rate of 6.2% of earned income, and would phase out for taxpayers with adjusted gross income in excess of $75,000 ($150,000 for married couples filing jointly). Taxpayers can receive this benefit through a reduction in the amount of income tax that is withheld from their paychecks, or through claiming the credit on their tax returns. This proposal is estimated to cost $145.309 billion over 10 years.

Comments

[Fitiwalt]

Check the latest withholding tables to implement the making work pay tax credit. The IRS sent them to employers early March, and you can read more about it by checking this article:

http://www.ehow.com/how_4863981_making-work-pay-tax-credit.html

[Fairmile]

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[Steve @ 2008 Taxes]

I wish the act had worked faster than it has been working. The money coming from ARRA has been slower than any of us would have liked.