Congressman Donnelly Announces Recovery Tax Cut For Working Families To Take Effect Today

Press Release

Today, Congressman Joe Donnelly announced that working families will have more money in their paychecks starting today as a result of the Making Work Pay tax cut. This provision was included in The American Recovery and Reinvestment Act and is the largest middle-class tax cut in American history.

"During these difficult economic times, Hoosiers are struggling to make ends meet on a daily basis, whether it be buying groceries, gassing up the car or paying the utility bill," Donnelly said. "This tax cut will get money into the pockets of those who need it most."

The Making Work Pay provision provides a refundable tax credit up to $400 for working individuals and $800 for married taxpayers filing joint returns through 2010. 2.4 million Hoosiers will benefit from this tax cut.

For workers who receive a paycheck and are subject to withholding, the credit will typically be handled by their employers through automated withholding changes. Because the tax change is retroactive to January 1, in some cases, employees will have no federal tax deducted in upcoming paychecks.

If an employee is eligible for the maximum amount of the tax credit, and her employer begins using the revised tax tables starting April 1, she can expect to bring home an additional $44 each month as a single filer or $89 as a joint filer.

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