Titus: Making Work Pay Tax Credit to Take Effect Today

Press Release

Hard-working Nevadans will begin to see more money in their paychecks said Congresswoman Dina Titus of Nevada's Third District, pointing to the Making Work Pay tax credit under the American Recovery and Reinvestment Act that is set to take effect today. Under the provision, employers must switch to new withholding tables by April 1 that will result in 95 percent of America's workers receiving more money on payday. In Nevada, approximately 960,000 Nevadans are set to benefit from the tax credit.

"The Making Work Pay tax credit will put money back in the pockets of Nevada's workers immediately," Congresswoman Titus said. "During this tough economic time, this boost in workers' paychecks can have a big impact on families struggling to make ends meet. Along with the other tax cuts and critical investments in the recovery package, the Making Work Pay tax credit will help us dig out of this economic recession."

The Making Work Pay provision, one component of the largest tax cut in American history, provides a refundable tax credit of up to $400 per worker and $800 per couple that phases out completely at $95,000 for single filers and $190,000 for joint filers. Some workers have already seen the increase in their paychecks as employers switch to the new withholding tables.

If an employee is eligible for the maximum amount of the tax credit, and the employer begins using the revised tax tables starting April 1, an employee can expect to bring home an additional $44 each month as a single filer and $89 as joint filers.

Additional Tax Relief Provisions in the American Recovery and Reinvestment Act:

• Enhanced credits for tax years 2009 and 2010 including an expanded Child Tax Credit, expanded Earned Income Tax Credit, and a permanent American Opportunity Tax Credit of $2,500 to make college more affordable.

• Expanded first-time homebuyer credit. Homebuyers who purchase in 2009 can get a credit of up to $8,000 with no payback requirement.

• One-time payment of $250 for Social Security recipients, veterans and railroad retirees.

• Tax deduction for new vehicle purchases. Taxpayers who buy certain new vehicles in 2009 can deduct the state and local sales taxes they paid.

• Tax free unemployment benefits up to $2,400.

• Net operating loss carryback. Small businesses can offset losses by getting refunds on taxes paid up to five years ago.

• COBRA subsidy to help recently laid-off workers afford health insurance from their former employer.

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