For 2009 and 2010, the Making Work Pay provision of the American Recovery and Reinvestment (stimulus) Act will provide a tax credit of up to $400 for working individuals and $800 for married taxpayers filing joint returns. This tax credit, for taxpayers subject to federal withholding taxes, will be dispersed throughout the remainder of the calendar year in employees’ paychecks. Boston College weekly employees should see the impact of the credit via an increase in their net pay beginning with their April 3rd paycheck. Monthly employees should see a similar increase in their April 16th paycheck.
Depending on the employee’s personal exemptions, these net pay changes may result in an increase in take-home pay by as much as $13 per week or $65 monthly. This tax credit will be calculated at a rate of 6.2% of earned income and will phase out for taxpayers with adjusted gross income in excess of $75,000, or $150,000 for married couples filing jointly.
While it is not necessary to submit a new W4 Form to receive the automatic withholding tax deduction, the Internal Revenue Service is suggesting that individuals or married couples with multiple jobs may elect to submit a revised W4 Form to insure that enough federal withholding tax will be withheld to adequately cover their 2009 tax return liability.
We suggest that if employees have individual deduction questions they talk to their tax professional. Anyone wishing to file a revised W4 Form may do so by coming to the Human Resources Service Center (HRSC) located in More Hall room 370.