New Withholding Tables to Implement Making Work Pay Tax Credit

May 01, 2009

To implement the "Making Work Pay" refundable tax credit that was included in the recently-enacted American Recovery and Reinvestment Act of 2009, the IRS has released new withholding tables which employers must begin using by April 1. Generally, workers should receive the value of the credit (up to $400 for individuals and $800 for married taxpayers filing jointly) over time through decreased withholding rather than as separate checks or as refunds when filing tax returns. Revised W-4s are not required for these withholding changes.
 
The IRS will mail the revised withholding tables to many employers in mid-March. Until then, the new withholding tables are available here, on the IRS website. The IRS has asked that employers begin to use these revised tables as soon as possible, but in any event no later than April 1.

If you would like more information on the content of this alert, please contact Christine Burke Worthen, a shareholder and Chair of Eaton Peabody's Tax Practice Group, or Rodney A. Lake.

This alert is provided as general information, and is not a substitute for legal or other professional advice.