Making Work Pay Credit

Yes, it's Saturday morning and I'm in the office. This is the onset of the 6-day workweeks.  It lasts about a month and then we go to the 7-day workweeks.  No, I'm not looking for sympathy. This is just the winter/spring life of a tax guy.

Now that filing season is officially underway, there's been a lot of talk about this new credit.  The credit is $400 for working individuals and $800 for working couples.  The credit is actually calculated at 6.2% of earned income up to the $400 credit per individual, but will begin to phase out at $75,000 of modified AGI for a single individual and $150,000 of modified AGI for a married couple. Please note that for a married couple, only one spouse needs to work and they will receive the full $800 credit as long as the total earned income is at least $12,904.

Those individuals receiving certain retirement benefits such as social security, supplemental security income, railroad retirement or veterans benefits should already have received a $250 check from the government (not from the IRS) and their credit will be reduced by that payment.

OK, this is supposed to be taxes in plain English. Did everyone understand the above?  Bottom line - if you worked last year and made at least $6,452 ($12,904 for a joint return) in earned income, you will get a $400 credit ($800 for a joint return) as long as your total income did not exceed $75,000 ($150,000 for a joint return) and you did not receive social security benefits.