Turbo Tax Making Work Pay Credit

[bridget]

When I do turbo tax, I get an $800 credit for Making Work Pay. I answered their questions, and we don't receive a veterans or railroad pension.

I didn't realize we would get a credit on our taxes. I thought we were getting more money each paycheck?

Did I do something wrong?

 

[NYCDiane]

No, you didn't do anything wrong. If you want more info, you can go to the IRS website and it will explain the "Making Work Pay" tax credit. I was surprised when I got it, too, and I thought it was an error as well.

http://www.irs.gov/newsroom/article/0,,id=204447,00.html

 

[traces7]

When I do turbo tax, I get an $800 credit for Making Work Pay. I answered their questions, and we don't receive a veterans or railroad pension.

I didn't realize we would get a credit on our taxes. I thought we were getting more money each paycheck?

Did I do something wrong?

I'm pretty sure if you get a normal paycheck, it was done on your paychecks, you can't claim it again on your tax form. I'm not sure though.

I think you can only claim it on your tax form if you did not receive it during the year on your paycheck. I don't know anything about TurboTax though and their questions. So I'm not really too sure.

Also, does anyone know if Making Work Pay is being done again in 2010? It sounds like it is. We'll have to adjust our withholdings if it is, because we came close to paying in this year. We didn't worry about it this year, because DH was unemployed half the year.

Oh wait, I found more info on it, maybe you do have to do something when you fill out your taxes. Here's a link http://www.bankrate.com/finance/taxes/claiming-the-making-work-pay-credit-1.aspx

 

[bridget]

We always both claim zero and didn't do any adjustments. I would think the same thing, too. I'm still entering stuff, so once I get to the printed forms, I'll double check everything!

 

[samdog]

In April of 2009 the withholding tables were lowered in order to provide more money in your net paycheck as part of a stimulus program. The tax rates were not lowered. As a result you now take the credit. If the credit was not made available you would owe more in taxes because you were underwithheld. You actually got the credit with each pay check throughout 2009.

 

[DVCBELLE]

I was pretty excited to see we got the credit through Making Work Pay as well - between that and the child tax credit - we are getting an awesome refund this year!!

I know I have been lending my money to the gov't for free....but it is still nice to get!

 

[2TxAgs]

I'm totally confused. Starting in March, the amount that was withheld from our paychecks was reduced (about $20/check, paid 2x month, so by about $400 for the year) Now we also take a $400 credit on the 1040???? Isn't that getting the credit twice? Seems like it to me, but I cannot find anywhere where the IRS says - if you already had your withholding reduced, you've already gotten this credit and do not take it again. HELP!

TxAg

 

[traces7]

:goodvibe

I'm totally confused. Starting in March, the amount that was withheld from our paychecks was reduced (about $20/check, paid 2x month, so by about $400 for the year) Now we also take a $400 credit on the 1040???? Isn't that getting the credit twice? Seems like it to me, but I cannot find anywhere where the IRS says - if you already had your withholding reduced, you've already gotten this credit and do not take it again. HELP!

TxAg

I was too, but read this: http://www.bankrate.com/finance/taxes/claiming-the-making-work-pay-credit-1.aspx
and here's a link to the Form M directions (which is what you fill out to claim the credit) on the IRS website: http://www.irs.gov/pub/irs-pdf/i1040sm.pdf
HTH.

I don't understand it either, seems like you're getting it twice, but that's what they say to do! So we're getting $800 more back than I originally thought!

On the 1040EZ the worksheet is on the back, 1040A see line 40, 1040 see line 63

 

[hopemax]

As I understand it...

Let's say, before the stimulus plan your tax burden was $6000. Then came the program, which decreased your tax to $5200 (assuming married filing jointly). Then the government said, we want you to have the money now, not later, so here is ~$13 per paycheck. So you got your $800 already.

However, now it's time to do the taxes. Remember, when all we had was paper, and you would flip to the back to the tables and look up your income and it would tell you how much you owed? Those tables didn't change, so it still said you owed $6000. So to make it right, you get a credit for $800, so that brings down the "owe" to the correct $5200. Then you subtract what you already paid, etc.

You aren't getting another $800, it's just an accounting correction.

 

[sweetpeakaris]

I'm confused about this as well. I was doing my BFF & her DH taxes, due to low income and having 6 children, her tax liability was $0, but yet she still got the $800 credit. All throughout the year of 2009, no Fed taxes were taken from her check.

 

[delmar411]

I'm confused about this as well. I was doing my BFF & her DH taxes, due to low income and having 6 children, her tax liability was $0, but yet she still got the $800 credit. All throughout the year of 2009, no Fed taxes were taken from her check.

it's a refundable credit which is why they will get the $800. Refundable credits give you money back as if you paid it in. Like the additional child tax credit and the earned income credit.

 

[2TxAgs]

hopemax - thanks, your explanation cleared things up for me.

TxAg