The “Make Work Pay Credit”…what it means for you

We have all heard the word “stimulus” and a lot of us get a little happy feeling inside knowing that you are going to be getting back some of your hard earned money. This term is getting thrown around a lot, especially when it comes to our new President, Barack Obama. This week (January 12th) the House Democrats have been working on an 825 billion dollar bill called the “American Recovery and Reinvestment Bill” that will have a mixture of spending and tax relief for U.S. citizens. Since taxes is what we do here, we are going to focus on the most important piece for you, the average income consumer, and that piece of this bill is called the “Make Work Pay Credit.”

Whether or not you think so, you have heard of the “Make Work Pay Credit,” although maybe not by name. This concept was one of the primary focus’ of Obama’s Presidential campaign. At this time, the Democrats are negotiating $145 billion to go toward this program to help low and middle income Americans. Basically, as long as you are a working citizen, you are entitled to $500 per individual and $1,000 for couples in tax credit. This credit will be paid out in two ways. Either workers will have the amount added to their paychecks or their income tax return at the end of the year. Now, this credit may not be available until 2009 or 2010 and only those who make less than $75K a year are eligible ($150K for couples).
Here’s the kicker. The “Make Work Pay Credit” will also be refundable. That means that even those people who do not make enough money to file taxes would receive a credit.

There are a few other aspects of the “American Recovery and Reinvestment Bill” other than the stimulus checks too. They are talking of increasing the refundable portion of the “Child Tax Credit” meaning you will receive more money per child as well as attempting to expand the “Earned Income Tax Credit” which reduces the amount of taxes that low income citizens have to pay.

I don’t know about you, but all this sounds good to me! More money in your pocket means more ends met.

Tags: American Recovery and Reinvestment Bill, average income consumer, Barack Obama, child tax credit, earned income tax credit, house democrats, Make Work Pay Credit, Obama, President, stimulus

Obama’s “American Recovery and Reinvestment Bill”

Just in the last few days, House Democrats have been hashing out a bill that is being called the “American Recovery and Reinvestment Bill” to hopefully stop the bleeding of our economy. This $825 billion bill is actually two bills in one. There will be $550 billion in spending that will be handled by the House Appropriations Committee, but the remaining $275 billion will be used for tax breaks.

That’s right! The second half of this bill is said to include some tax breaks for businesses known as a “carryback” but the majority is going to the “Make Work Pay Credit” for low income families to receive another stimulus. (read more on the “Make Work Pay Credit“)
Unfortunately, this won’t happen on Tuesday immediately when Obama is sworn in as President, but let’s hope that we can all see a little relief soon.

Tags: $825 billion, American Recovery and Reinvestment Bill, carryback, House Appropriations Committee, low income, Make Work Pay Credit, Obama, President, tax breaks