Withholding Tables Released to Distribute New Tax Credit for Workers
February 26, 2009
IRS has published new withholding tables incorporating the Making Work Pay credit enacted as part of the American Recovery and Reinvestment Act of 2009. Unlike last year’s economic stimulus payment, taxpayers will not receive a special check in the mail from the IRS. Eligible taxpayers will need to claim the credit on their 2009 tax returns; however, the benefit will be spread out over the paychecks they receive beginning this spring through the end of the year.
These new withholding tables and instructions for employers will be included in an updated Publication 15-T, which is expected to be posted on the IRS website shortly and will be mailed to employers in mid-March. The IRS is directing employers to begin using the new tables as soon as possible but not later than April 1.
The new credit, available for tax years 2009 and 2010, is 6.2 percent of a taxpayer’s earned income, with a maximum credit of $400 for working individuals and $800 for married filing jointly. Because it is refundable, low income workers that owe no tax will be able to qualify for the credit. For most eligible taxpayers, the new credit will be included in their paychecks
Higher-income workers will see little or no change in their take-home pay. The credit phases out for taxpayers with adjusted gross income between $75,000 and $95,000 for single filers or between $150,000 and $190,000 for married couples filing jointly.
According to IRS, eligible taxpayers will get the benefit of this change without any action on their part. This means that employees don’t need to fill out a new W-4 withholding form to get the Making Work Pay credit reflected in their take-home pay. A Form W-4 will not need to be submitted for the automatic withholding change. However, employees with multiple jobs, or married couples whose combined income places them in a higher tax bracket, may want to submit revised Form W-4 forms to ensure enough withholding is held to cover the tax for the combined income. Publication 919 provides additional guidance for tax withholding.
- College Endowment Average Return Falls to 2.4 Percent in FY15, Endowment Spending Up Sharply
- NACUBO Urges One-Year Postponement of Changes to 1098-T Reporting Requirements
- GASB Addresses Asset Retirement Obligations and Seeks Field Testers
- 2016 Higher Education Accounting Forum
April 10-12, 2016
- 2016 CAO and CBO Collaborations
August 1-2, 2016
- 2016 Planning and Budgeting Forum
September 19-20, 2016
- WEBCAST: Legislative Lunchcast: A 30-Minute Washington Update from NACUBO
Monday, February 22, 2016 12:00pm ET
- WEBCAST: Responsibility Center Management: Two Different Perspectives
Thursday, March 17, 2016 1:00PM ET
- WEBCAST: Title IX: Key Issues Surrounding Institutional Compliance
Wednesday, April 20, 2016 1:00PM ET
- WEBCAST: The Clery Act: Strategic Planning to Mitigate Institutional Risk
Thursday, May 26, 2016 1:00PM ET
- ON-DEMAND: NACUBO Live! Results of the 2015 NACUBO-Commonfund Study of Endowments
- A Guide to College and University Budgeting: Foundations for Institutional Effectiveness, 4th ed. - by Larry Goldstein
- NACUBO's Guide to Unitizing Investment Pools - by Mary S. Wheeler
- Managing and Collecting Student Accounts and Loans - by David R. Glezerman and Dennis DeSantis