The new American Recovery and Reinvestment Act of 2009, meant to stimulate the American economy, includes a "Making Work Pay" benefit. Technically, it’s a credit against the federal income tax you’ll owe.
Amount of the credit: Workers get $400 a year, in 2009 and 2010. Workers who are married to a spouse who doesn’t go to a job will get $800 each year.
Retirees (including federal pensioners) will get $250 apiece in 2009. Any amount you receive as a retiree will reduce the amount you’ll get as a worker.
How you’ll get it: Workers will get a modest increase in each paycheck until the maximum is reached. This credit is structured to offset the amount that comes out of your paycheck for Social Security.
Retirees will get their $250 by some other means, such as direct deposit into a bank account.
Who won’t get it. If your adjusted gross income (AGI) tops certain levels, you may get a smaller tax credit, or nothing.
If your AGI (with minor modifications) as a single taxpayer is over $95,000, you’ll get no "Making Work Pay" credit. With AGI in the $75,000-$95,000 range, your credit will be between $400 and zero.
Married couples filing joint returns need AGI under $150,000 for the full $800 credit while those with AGI over $190,000 won’t get anything.
