Making Work Pay Tax credit

Discussion in 'Budget Board' started by MickeyHereWeCome!, Apr 13, 2010.

  1. MickeyHereWeCome!

    MickeyHereWeCome! DIS Veteran

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    So yes, I'm one of the last minute filers:). Luckily, I'm down to one issue.

    I have a question regarding the "Making Work Pay" tax credit. My husband works out of the home and we did see an increase in his take home pay last year, due to this stimulus plan. If we saw this increase, meaning his employer took out less in taxes, is this all we need to do with it? Is the amount of this credit already taken into account with the tax tables?

    I'm using Turbo Tax, and it is trying to tell me that we should have an $800 credit. That would be great if it is correct, but the fact that we had less taken out this year, would seem to have fulfilled this credit. The program only asks if we have received a check due to being eligible for a refund (if we had collected social security, etc.), which we haven't.

    I personally haven't had any taken out because I am self employed (daycare), so maybe this makes a difference?

    Any thoughts? Did you all take a credit when filing or did you assume you had already gotten the credit?

    TIA
     
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  3. Juliee8

    Juliee8 Mouseketeer

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    The $800 credit is correct. The making work pay credit was $400 for single people and $800 for married couples.
     
  4. disneymore2

    disneymore2 Mouseketeer

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    Juliee is correct. This credit is confusing lots of people this year. Since most peoples withholdings were decreasede during the year, you have technically already received the credit thru a higer take home pay. However you still need to take the credit on your 1040 and it will affect your refund/ tax due by 800 (if ur married).
     
  5. hopemax

    hopemax Note to Self:

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    Take the $800 credit. It's not really additional money but an "accounting correction." Let's say you were going to owe $6000 in taxes, the stimulus bill amended the tax rules this year to say you would only owe $5200 instead. Withholding tables were changed to reflect this, which is why your DH got more take home.

    However, they did not change the tax tables (the ones at the back of the tax booklet or pre-programmed in the software). They still reflect that you would owe $6000. By taking the $800 credit, it brings everything back into line.
     
  6. okeydokey

    okeydokey Frosty the Snowman scared me as

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    Yes you do get the $800 credit. The schedule M must be completed to claim it.
     
  7. ShannonMB

    ShannonMB DIS Veteran

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    As I understand it, the idea was to put a little more money in people's pockets throughout the year, which really wasn't going to help anyone if they ended up having to pay that in taxes at the end of the year. So the credit is there to offset it, so that you don't have to turn around and give back that little extra you got during the year.
     
  8. MickeyHereWeCome!

    MickeyHereWeCome! DIS Veteran

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    Thank you!!!!!! I was trying not to get too attached to that money, just in case:goodvibes.

    Now I can go ahead and send this in and get this huge weight off my shoulders....and off to order my iphone with my refund:cool1:
     

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