The Making Work Pay Tax Credit was a temporary measure introduced in 2009 to help reduce the financial burden caused by the 2008 economic crisis. It was only available for the years 2009 and 2010 and had strict limits on who could apply. Those eligible could claim up to $400 USD ($800 USD for married couples) on their income taxes. The credit was only available to those with a modified Adjusted Gross Income (MAGI) of no more than $95,000 USD annually if single or $190,000 USD annually if jointly married. The credit was made redundant by other tax-reducing measures introduced in 2010.
The Making Work Pay Tax Credit was part of the American Recovery and Reinvestment Act of 2009, to help reduce some of the financial burden on most taxpayers, which was primarily caused by the 2008 economic crisis. It was only available to the years 2009 and 2010 and was to be claimed on income taxes by those entitled to it. It had very strict limits on who could apply for credit, but these were relatively generous, allowing many to apply for full or, at least, partial credit that was fully refundable.
Those entitled to the Making Work Pay tax credit were people who received income from work or self-employment. They had a modified Adjusted Gross Income (MAGI) of no more than $95,000 US Dollars (USD) annually if they were single and $190,000 USD annually if they were jointly married. Taxpayers who were single and earned more than $75,000 USD or who were married, filing jointly, and who earned at least $150,000 USD may qualify for a lower amount of the credit.
The full Making Work Pay tax credit was $400 USD, if one person was eligible for the full amount, or $800 USD for married couples filing jointly. As mentioned, this is a refundable credit. This means that if a person filing taxes does not owe credit-reducing money, the government owes him $400 USD. Many people who have claimed the credit have been able to recover at least part of the amount or have been able to reduce the amount of taxes due at the end of the year.
To successfully apply for the credit, people had to file a Schedule M with their taxes. Failure to submit this form could mean that your credit has been cancelled. Some people with very high incomes have even found that instead of taking out credit they would end up with a small amount.
The Making Work Pay Tax Credit was only meant to be temporary, and there have been other tax-reducing measures put in place since 2009. Some of these reduce the amount of taxes that most people in these income groups deducted from take-home pay. When these additional tax breaks came into effect, especially in 2010, they made the Making Work Pay program redundant. In 2010, taxpayers who were able to apply for this credit enjoyed a doubly advantage because they benefited from less taxes paid during the year and also from the credit.
Smart Asset.
Protect your devices with Threat Protection by NordVPN
