$800 MAKING WORK PAY TAX CREDIT stimulus - Working Tax Credit $400/$800

$800 Making work pay tax credit

Tax breaks in Obama's Economic Stimulus plan 2009
Obama's $789 billion economic stimulus package which was passed by the US house of representatives contains several tax cuts and tax credits in order to give the ailing US economy a boost. Some examples of such tax credits are $8000 housing tax credit (also called first time home buyers tax credit, tax deduction for new cars less than $49,500 (called Auto Assitance Ownership amendment) and the $800 Making work Pay tax credit for married couples or $400 making work pay tax credit for single filers. This post is about the $800 Making work pay tax credit also referred to as Working Tax credit.

The good news - $800 Making work pay tax credit details - $400/$800 Working Tax credit.
$400 Making work pay Tax CreditAccording to the new economic stimulus plan, every US taxpayer having annual income upto $75000, would be eligible for a tax credit of 6.2% upto $400. This tax credit is $800 for married couples with total annual income of upto $150,000.

An earlier version of the economic stimulus package had making work pay tax credit of $1000 for joint filers and $500 tax credit for single taxpayers. Unfortunately this tax credit had to be scaled down to $800 and $400 respectively in the later version.

Making work pay tax credit is not a stimulus check or a rebate check
How does making work pay tax rebate work?
Unfortunately, according to the current economic stimulus package, tax payers will not be able Making work pay Federal Tax credit, IRS tax cuts - additional $33 in monthly paycheck of workers & taxpayersto get their making work pay tax rebate check in lump sum. Instead, workers and tax payers will have to choose between the following two options:
  1. The Federal Govt. distributes the 'making work pay tax credit' by 'withholding less tax'. (e.g. If a single taxpayer wants to start receiving the tax credit money immediately, and is paid monthly, he/she would receive approximately $33 per paycheck).
  2. The worker/taxpayer can file the sum as a tax-exempt income while filing 2009 tax return.

Other Tax Breaks, Tax Credits, Tax Rebates in 2009 Economic Stimulus Package that maybe of interest to you

  • 2009 Obama Stimulus Package details explained.
  • New Car Purchase Auto Stimulus details explained- Excise and Sales Tax deduction for new purchase of new vehicles.
  • $8000 First Time Home Buyer Tax Credit details- 2009 Housing Stimulus Bill in Economic Plan proposed by Obama.
  • $800 Making work pay tax credit stimulus- details explained ($400 working tax credit for individuals and $800 tax credit for married taxpayers).
  • $250 Social Security Stimulus Check in 2009 Economic Stimulus Package.
  • 2009 Cobra Stimulus Package 65% Reduction in Cobra Health Insurance Premium for qualifying individuals.
  • 2009 Stimulus Checks? Economic Stimulus Payment
  • $1000 Child Tax Credit, Dependent Tax Credit 2009 extension.

  • Feb 18, 2009

    40 comments:

    Anonymous February 20, 2009 at 2:59 AM  

    do unmarried couple qualify for 800 making work pay tax credit?

    iinvestor February 20, 2009 at 3:00 AM  

    Each of you can separately file for a 400 making work pay tax credit.

    Anonymous February 20, 2009 at 3:28 AM  

    What about single income married couples, will the single income see the $800 tax credit?

    iinvestor February 20, 2009 at 9:33 AM  

    I think so. As long as you are filing your taxes jointly, you get the benefits of a 'married couple' no matter if you are a household with single income.

    Anonymous February 23, 2009 at 6:36 AM  

    Lets say both parents work and qualify for the $800. The wife though only works part time has a minimal amount taken out for fed taxes (around $16/month). How wil that work? Will they stop taking the $16 a month, and the rest credited when we file taxes next year?

    Sarah February 25, 2009 at 2:43 AM  

    How do you know how much credit to report on your 2010 return if your employer implements the new tax tables? Will this be listed on your W-2? Or will it just be a flat $400 or $800?

    iinvestor February 26, 2009 at 12:27 AM  

    I recently got an email about housing stimulus or the economic stimulus plan asking me to write a detailed post on what are the exact benefits and tax credits offered in the current 2009 economic stimulus package.

    I would first like to request anyone to post a comment instead of sending an email.

    Secondly, I have already mentioned the main tax credits,tax breaks and tax cuts that are included in the current economic stimulus plan. Let me list all three here-
    1. 8000 first time home buyer tax credit - housing stimulus

    2. 1000 child tax credit - again it was part of the stimulus plan to extend the $1000 child or dependent tax credit to 2009.

    3. 400 making work pay tax credit for individuals and 800 making work pay tax credit for married couples. This should be thought of as a substitute of stimulus paycheck send by Bush administration last year. There is no second stimulus paycheck coming - rather instead we have the $400 stimulus for individuals (respectively $800 stimulus for married filers)

    iinvestor February 26, 2009 at 12:29 AM  

    another comment i receieved in mail -

    is a second stimulus paycheck coming in 2009?

    answer: no there is no second stimulus paycheck. rather we have a substitute tax credit of $400 - 400 Making work pay tax credit for individuals and 800 making work pay tax credit for married taxpayers.

    Dan February 26, 2009 at 12:31 AM  

    Do you think Obama government will send second stimulus paycheck later on in addition to $400 making work pay tax credit?

    iinvestor February 26, 2009 at 12:34 AM  

    @Dan
    well another stimulus paycheck would be nice- right now there are no indications in that direction. Remember the current economic stimulus package by Obama is already a huge one- it offers $8000 housing stimulus, extension of $1000 child tax credit and also $400 , and $800 stimulus check, oops. i means tax credit for individual taxpayers and married filers respectively.

    The current stimulus plan already faced significant opposition by republicans. I dont know anythign about 2010, but i will be surprised if a Obama announces a stimulus paycheck for 2009 in addition to all the above stimulus.

    iinvestor February 26, 2009 at 12:37 AM  

    I will write a detailed post about $250 social security stimulus or 250 USD Social Security Payment and Working Credit later soon.

    Anonymous February 28, 2009 at 12:45 AM  

    if you do not have a job and are unmarried how are you supposed to receive this tax credit?

    John March 2, 2009 at 3:55 AM  

    re: "If a single taxpayer wants to start receiving the tax credit money immediately, and is paid monthly, he/she would receive approximately $33 per paycheck"

    That doesn't make any sense. $33 per paycheck for the next 9 months would only be $297. I thought the credit was for $400????????

    Andy March 2, 2009 at 4:57 AM  

    Even though his is not a big credit, it is better than nothing. Pays for my weekly coffee habit atleast.

    James March 4, 2009 at 1:39 AM  

    Hello!!!! Its your money. Why do you feel Obama is doing you a favor. What will $13 week this year and $8 the next do to help anyone. Well I guess we really got "Change" about 52 quarters a week. How about dividing the stimulus between all of us.

    Cathy March 4, 2009 at 7:17 PM  

    Thats right if we were crooked bankers we could get bailouts of million instead of a few dollars.Im terribly up set with how the republicans never think of the small guy!

    GroovieGran March 5, 2009 at 1:39 AM  

    You won't have to wonder how to spend it, the increase in gas tax will take most of it and with the cap and trade bill imposed on the Utiliy companies then your Elec bill will take of any that is left.

    Anonymous March 10, 2009 at 5:45 AM  

    Cathy,

    You must be wrongly informed. It is not the republicans not thinking of the little guy. Our entire government is run by Democrats: President is Democrat, Senate has Democratic majority, and Congress has Democratic majority. Pelosi and Reed won't even let the Republicans hardly speak, let alone try to propose a bill to change things.

    Anonymous March 10, 2009 at 10:55 PM  

    My concern is about the tax implication when I file my 2009 taxes. If I am reading correctly, this amount will be tax-exempt. Is that correct?

    Thank you!

    Anonymous March 16, 2009 at 9:24 AM  

    If married what if both are retired (no longer earning paychecks but each receiving a pension)but only one is of age and collects social security? How or what sort of stimulus does each person get and how?

    Anonymous March 16, 2009 at 9:25 PM  

    I have two questions:

    I am married and we file jointly, we both work. Is there a chance that we will recieve more then $800? If so, what should I look to do to make sure I don't get hit when I file my 2009 return?

    Will we see the sanme increase in our pay(decrease in federal income tax)until we reach $800 as a couple? Or will we see an increase of different amounts from time to time?

    Anonymous March 16, 2009 at 10:18 PM  

    Is the below statement correct? Do I need to increase my federal withholding?

    "In addition, in the case of married couples filing jointly, the new withholding tables assume that only one spouse is working and will allow both spouses to receive the entire $800 credit through their paychecks. If both spouses are working, the couple is only entitled to receive one $800 credit and if their combined incomes exceed $190,000, then they are not eligible for the credit. These individuals may also wish to consult their tax advisors and adjust their federal tax withholdings accordingly."

    Anonymous March 21, 2009 at 9:20 PM  

    My Wife and I will gross just over 150K this year. Is the stimulus based on this or last years earnings? My income is just over 81K and my wife's is just under 70K. Which one of us is entitled to stimulus and how much. Am I completely disqualified at 81 or does it just start to phase out at 75? Thanks.

    Anonymous March 21, 2009 at 9:22 PM  

    Is my income based on before or after tax earnings?

    Anonymous March 23, 2009 at 8:06 PM  

    wow thats stimulus. what can we possibly stimulate with extra 30 a check? shame

    Anonymous March 27, 2009 at 1:00 PM  

    I beleive I have finally confirmed the fact that the new tax tables are set up to give EACH person claiming Married on their W-4 the full $800.00 tax credit (or for 2009 a portion thereof depending on when your payroll department switched to the new tables) Better check your withholding or you may owe this back with your 2009 1040 tax filing.

    Anonymous March 28, 2009 at 11:35 AM  

    Employers need to read this to change their withholding:

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

    Anonymous March 30, 2009 at 5:42 AM  

    I'm glad I'm not the only one confused by the W-4 & witholdings aspect of this whole 'working tax credt'.

    It is not clear, at any level, as to how this is supposed to function. It's terribly confusing.

    Are we to assume our employers have the information necessary to withold the correct amount, or are we better off spending the extra money hiring an accountant?

    It is frustrating, to say the least, to have an additional potential screw over while filing taxes. In an unrealistic way, would rather just bite the bullet and tell the gvt. to pack that $13 into their next gala events stuffed lobster.

    On the other hand, I intend on opening a mutual fund and having that $13 direct deposited each week.

    Either way, I think it's a farce. By the time the additional $ starts showing up in our pay checks, gas prices will have silently crept right back up along with it. Gas has allready risen here 8 cents in a week.

    If this wasn't real, it would almost be funny.

    Anonymous March 31, 2009 at 9:41 PM  

    So lay off workers are out of luck for this stimulus tax credit?

    Anonymous April 2, 2009 at 1:35 AM  

    For married couples, is the $800 split between two or who gets the amount in their check if both husband/wife work?

    Anonymous April 4, 2009 at 5:44 AM  

    I am retired on a state pension plan. Why are we excluded from the stimulus credit? I pay federal income tax just like employed people. We have bills to pay like everyone else.

    Anonymous April 6, 2009 at 8:47 PM  

    When we file our 2009 taxes will we need to pay taxes on the tax exempt money we received in our pay checks at the end of the year?

    Tracey April 27, 2009 at 8:47 AM  

    This stimulus deal, it only helps people who own homes or can afford to buy new cars. 18 dollars in a pay check, its not even enough for gas. We are not feeling the help of this. I don't get it, they want us to spend money to help the economy, but what are we going to buy with that. Most of us are living pay check to pay check, and are struggleing to pay our bills. GET A LOAN! HAHAHAH WHAT A JOKE THIS CRAP OUR LAST PRESIDENT GOT US IN, MOST OF US HAVE LOST OUR JOBS AND OUR CREDIT HAS GONE DOWN HILL FAST. I THINK I AM SPEAKING FOR ALOT OF PEOPLE, THIS ISN'T HELPING AT ALL. ATLEAST IF WE HAD A CHUNK OF MONEY WE WOULD BE MORE APT TO PAY OUR BILLS AND MAYBE BUY FOOD. I HAVE 5 KIDS AND MY HUSBAND AND I HAVE BOTH WENT BACK TO SCHOLL TO GET A BETTER CHANCE OF JOBS BUT HONESTLY, WHAT JOB IS SAFE ANY MORE. THEY ARE LAYING OFF PEOPLE WE NEED, NURSES, POLICE, FIRE MEN/WOMEN. WE HAVE NO JOB SECURITY ANY MORE. SO IS GOING BACK TO SCHOOL, AND GETTING GRANTS ETC. TO PAY FOR THEM REALY WORTH IT IF WHEN WE FINISH OUR PROGRAMS FOR NURSEING, COMPUTER REPAIR, GRAPHIC COMM., TEACHER ARE WE EVEN GOING TO HAVE WORK THEN. I THOUGHT THE PRESIDENT AND THEM WOULD DO A BETTER JOB THEN THIS FOR A STIMULUS , OR WHAT THEY CALL A STIMULUS. BUT THEN AGAIN WHAT DO THEY CARE THEY HAVE JOBS, INSURANCE PAYCHECKS SO BASICLY ALL US LITTLE PEA ONS ARE JUST STUCK COMPLAINEING ABOUT IT. WHEN THEY LEAVE THEIR JOBS THEY WILL ALWAYS HAVE INSURANCE , AND PAY SCREW THE LITTLE PEOPLE.

    Bekah May 1, 2009 at 4:08 AM  

    I'm hoping someone can help me with this one...

    I am a 20-year-old, full time student, and I'm employed full time as a CPhT. Last year, I did not receive a stimulus check, because I could be claimed as a dependent of my father's (b/c I am under 24, and I still use his health insurance). However, he didn't receive stimulus money for me because I am over 18.

    Does this mean that again, I will not benefit?

    If this is the case, it's incredibly unfortunate that young taxpayers like myself are ignored by the govenment.

    We support ourselves through college, we pay taxes, we don't abuse welfare with children we can't afford to care for, yet we get no stimulus help whatsoever?

    Looks like our work isn't paying off.

    Anonymous May 1, 2009 at 7:19 PM  

    ok, there are about 40 million people working over the age of 50.
    how to help the auto,banking and job situation.
    i saw this the other day
    1.over 50 working give them each $1M
    Criteria:
    a. Must purchase a new american car
    b. Must pay down their mortgage
    c. Must retire

    Outcome:
    a. American autos will be purchased
    b. Mortgages will be paid down to help the banking/financial
    c. Jobs will become open.

    We have spent enough $$ on bailing these business's give more to the people.

    AJ100 April 8, 2010 at 10:40 PM  

    "Unfortunately, according to the current economic stimulus package, tax payers will not be able to get their making work pay tax rebate check in lump sum. Instead, workers and tax payers will have to choose between the following two options:

    The Federal Govt. distributes the 'making work pay tax credit' by 'withholding less tax'. (e.g. If a single taxpayer wants to start receiving the tax credit money immediately, and is paid monthly, he/she would receive approximately $33 per paycheck).
    The worker/taxpayer can file the sum as a tax-exempt income while filing 2009 tax return."

    The above quote seems to be wrong.I received the $800.00 in a lump payment. My refund check was increased by $800.00. I received it two days ago.

    The IRS will send a letter explaining why they adjusted my refund amount.

    AJ100

    Anonymous April 13, 2010 at 2:03 AM  

    i didn't know about this and basically compare my forms to last years.i was pleasantly surprised to receive my check today in the mail with the explanation.the irs can be good guys too.

    Anonymous April 15, 2010 at 10:46 PM  

    So, if I have no income for 2009 can I still get the $400 as a rebate? I am a full time student and are not claimed on my parents return.

    Anonymous April 16, 2010 at 4:57 PM  

    So let's get this straight. We borrowed $800,000,000,000 from China so each one of us can have a $400 tax credit.

    Your great-grandchildren will be so thankful as they will still be trying to pay it off.

    unhappy tax payer November 17, 2010 at 1:12 AM  

    married people and both working should get less credit and single people should get more of a tax credit single should get 800.00 and married should get 400.00

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