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What you need to know about the 2009 Stimulus Tax Changes? March 12, 2009

Posted by 2bdebtfree in Financial Debt Budget.

Changes in Income Tax Withholding

Matax_savings_planking Work Pay Tax Credit (MWPTC)
American Recovery and Reinvestment Act of 2009.

The 2009 and 2010 credit amount per year is:
$400 per single
$800 per married couple

The tax tables were changed based on a January 1, 2009, start date and were intended to be spread out over the entire year. Your Payroll to date may have been processed under the old tax tables and most employees will not receive the entire credit on their 2009 paychecks. Any difference will be refunded when your federal income tax return is filed next year.

Claiming …

Single: Approximately $15/bi-weekly
Married: Approximately $30/bi-weekly
Note: The “married” tax tables assume that only one spouse is working

If you have 21 pay periods left in 2009. If you are claiming Single, you will see approximately $15 more in net pay per pay period.

$15 * 21 pay periods = $315

You would receive the remaining $85 ($400-315) upon filing your 2009 federal income tax return.


Married and Both Spouses Working

If you are married, both spouses working, and both claiming “Married”, you may owe additional tax when you file your taxes for 2009.

Spouse 1: $30 more per pay period with 21 pay periods left in 2009
$30 * 21 = $630

Spouse 2: $30 more per pay period with 21 pay periods left in 2009
$30 * 21 = $630

$630 + $630 = $1260

According to the Making Work Pay Tax Credit, a married couple is entitled to $800 but received $1260. They would owe an additional $460 in tax.

Work for two or more Employers

If you work for two or more employers, you may owe additional tax when you file your taxes in 2009.

Your net will be increased at each job (federal tax would be reduced) resulting in owing additional money at tax time.
_ _ _ _

To offset the double credit, you may want to have an additional amount withheld each pay period. To do this you will need to complete a new W-4 form and indicate on line 6 an additional amount to be deducted for your federal tax.



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