Rockefeller Statement On "Making Work Pay" Tax Credit

Statement

Rockefeller Statement On "Making Work Pay" Tax Credit

Senator John D. (Jay) Rockefeller IV announced that the "Making Work Pay" tax credit goes into effect today, Wednesday, April 1, 2009.

Under this tax credit, working Americans will get a credit of $400, and working families will get a credit of $800 per year. This tax credit was part of the American Recovery and Reinvestment Act that passed with Senator Rockefeller's support and was signed into law this February.

"We need real relief for our hard working families who are caught in this struggling economy—and the Making Work Pay tax credit does just that," said Senator Rockefeller. "These common sense policies will allow Americans to keep more of their paychecks starting this month. This puts more money in the pockets of hard working Americans - at least 670,000 workers in West Virginia will be receiving more money as a direct result of this credit."

For 2009 and 2010, the Making Work Pay provision of the American Recovery and Reinvestment Act will provide a refundable tax credit of up to $400 for working individuals and $800 for married taxpayers filing joint returns. For the average family paycheck, this means workers will begin seeing a decrease in the federal income taxes withheld from each paycheck by about $30 per paycheck every two weeks or $60 for couples.

This tax credit will be calculated at a rate of 6.2 percent of earned income and will phase out for taxpayers with adjusted gross income in excess of $75,000, or $150,000 for married couples filing jointly.

According to the IRS, it is not necessary to submit a Form W-4 to get the automatic withholding change. However, an employee with multiple jobs or married couples whose combined incomes place them in a higher tax bracket may elect to submit a revised W-4 to ensure proper withholding is held to cover the tax for his or her combined income.

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