You may be entitled to the 2009 Making Work Pay tax credit if you have earned income for 2009.The maximum credit is $400 for single filers and $800 for married filing jointly. You figure the credit on Schedule M and attach it to your 1040.
Who can claim the credit?
You have earned income for 2009.
You are not claimed as a dependent by another taxpayer.
Your modified adjusted gross income is less than $90,000 for single filers or $190,000 for married filing joint.
You are not a nonresident alien.
What is the Making Work Pay credit?
Federal income tax withholdings from your wages were reduced during 2009. This only reduced your withholding but provided no tax benefit. You get the tax benefit by claiming the credit.
The credit is refundable, meaning that the credit is treated as a payment and you can receive the credit as a refund.
The credit is calculated as 6.2% of your earned income to a maximum of $400, $800 for married filing jointly. The maximum credit is reached when your earned income exceeds $6,451 or $12,903 for married filing jointly.
The credit is reduced when your modified adjusted gross income is greater than $75,000 or $150,000 for married filing jointly. The credit completely phases out at modified adjusted gross income of $95,000 or $190,000 for married filing jointly.
Social Security recipients
If at the beginning of 2009 you were receiving Social Security or other government benefits such as veteran’s disability benefits, you should have received a $250 economic recovery payment. This payment reduces any Making Work Pay credit available to you, if any.
Government Retiree Credit
If you received a pension or annuity from the US government or a state and local government you may claim a credit on Schedule M. Your credit will be $250, provided you did not receive a $250 economic recovery payment through Social Security. The government retiree credit will reduce any Making Work Pay credit allowed on Schedule M.
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