Stimulus Package Provision Reduces Employee Income Taxes
The “Making Work Pay” provision of the stimulus package will reduce income tax withholding for majority of employees.
Did you have to pay taxes on your 2009 tax returns? StaffScapes is reminding you the “Making Work Pay” pay provision applies for the 2010 taxes as well. The change comes from the $400 to $800 refundable tax credit provided under the stimulus package. This tax credit will be provided to employees through out 2010 by changing the tax withholding from their normal paychecks. This credit is for employees making less than $75,000 individually or $150,000 for married couples. A new W-4 form is not needed to claim this tax change. StaffScapes recommends that employees with multiple jobs or couples that file a combined tax return should contact their tax advisor to verify and/or revise their W-4.
The effect of this change will result in more “take home” pay for most employees. Additional information about the stimulus package, including the “Making Work Pay” provision, can be found on the IRS website.