U.S. Sen. Claire McCaskill said last week that Missourians are receiving a little extra money in their pockets each month through the American Reinvestment and Recovery Act.
“It may not sound like much, but for hard-working families a little extra money in their pockets each week can really make a difference when times are tough,” McCaskill said. “Millions of families in Missouri have already seen an increase in their paychecks thanks to the economic recovery efforts. It’s enough to splurge on a dinner out or a movie.”
The Making Work Pay Tax Credit is a credit designed to offset up to $400 of their payroll taxes. Employers typically withhold a certain amount from each of their employees’ paychecks to cover payroll, income and other taxes. In an attempt to get money in the pocket of American taxpayers as soon as possible, the Internal Revenue Service announced new withholding guidelines that will reduce the amount employers will withhold for income tax each paycheck. For most working people, this will increase weekly paychecks, rather than providing the money as a tax refund during tax season. The self-employed and other workers who do not have income taxes withheld will still be eligible for the credit at the end of the year, however.
She said about 95 percent of working families will see an increase in their monthly income.
Taxpayers will receive a payroll tax credit of up to $400 per working individual or $800 per family for 2009 and 2010.
Families with two incomes will see an increase of at least $65 per month in take-home pay.
The credit is available to all workers making up to $150,000 per household.
In Missouri, more than 2.2 million households have already seen an increase in their paychecks and more than $1.1 million has been distributed
Families with combined income over the income limit, people working multiple jobs and pensioners should check with the IRS to make sure the proper amount is being withheld from their paychecks to avoid problems when they file their taxes.