By Johnny Jackson
Taxpayers are starting to get their share of the federal economic stimulus package, according to officials.
Qualified taxpayers will receive additional money in their paychecks in the form of a credit toward their withholding taxes, known as the Making Work Pay credit.
"Generally, the credit will have no effect on your taxes at the end of the year," said Mark Green, spokesman for the Internal Revenue Service. "However, [for next tax season] individuals and couples with multiple jobs may want to submit revised Form W-4 forms to ensure enough withholding is held to cover the tax for the combined income."
Green said the withholding credit should be reflected in eligible workers' take-home pay.
The credit will be available to workers for the next two years, at 6.2 percent of a taxpayer's earned income, with a maximum credit of $800 for a married couple filing jointly, and $400 for other taxpayers. The credit will, however, be phased out for higher-income taxpayers.
The credit will benefit more than the average taxpayer, according to Green. Most workers, he said, will qualify for the full credit, even if they owe no tax, or are not required to file an income tax return.
Conversely, many higher-income taxpayers will see little or no change in their take-home pay as the credit will be phased out. Married couples whose modified adjusted gross income on a joint return is between $150,000 and $190,000, will see the credit phased out. Individual taxpayers whose modified adjusted gross income is between $75,000 and $95,000 also will see it phased out.
"Though all eligible taxpayers will need to claim the credit when they file their 2009 income tax return next year, the benefit will generally be spread out over the paychecks they receive beginning this spring, and continue until the end of the year," Green said.
Taxpayers will not get a separate stimulus check mailed to them from the IRS like last year's economic stimulus payment.
"What taxpayers need to understand is that at the end of the tax season, they'll see a reduction in their withholding, a reduction in their tax liability, and they'll be bringing home more money in [their] pay checks," Green said.
On the net:
Internal Revenue Service: