Theoretically speaking that is. This is to clear up some confusion regarding the recent “tax cut” that became effective April 1, 2009.
- You will not be getting a physical check as was done previously. The tax reduction is reflected in your paycheck withholdings.
- Everyone with earned income is eligible for the tax reduction (unless you have too much income).
- The withholding tables were adjusted effective April 1st 2009 to increase the take home pay of those that are eligible.
- The credit is $400 for single filers and $800 for married filers however it cannot exceed 6.2% of your earned income.
- If you make too much money you do not get the credit, it is phased out beginning at $75,000 for single filers and $150,000 for joint filers.
- The credit is “refundable” which means that even if you owe no tax but are otherwise eligible, you will get the credit and a refund check will be issued when you file your return.
- The credit is effective for the 2009 and 2010 tax years.
Any questions?
