Making Work Pay Tax Credit means more take-home pay
From the Payroll Department
The Internal Revenue Service has released new withholding tables that will result in more take-home pay. The University of St. Thomas started using these tables with the March 13, 2009, paychecks.
In 2009 and 2010, the Making Work Pay provision of the American Recovery and Reinvestment Act will provide a refundable tax credit of up to $400 for working individuals and up to $800 for married taxpayers filing joint returns. These credits will be given through the automatic withholding changes provided in the tables that we have in place.
It is not necessary to submit a Form W-4 to get the automatic withholding change; however, an individual employee or a married couple with multiple jobs may have an issue with the new federal tax tables not withholding enough taxes. Multiple jobs may create under-withholding on an overall basis as the tax credit may be applied through the withholding process to both jobs when it should only be applied to one job.
Employees that fall into this group can consult the IRS withholding calculator or with their personal tax accountant to determine if they need to revise their form W-4 to ensure enough withholding is held to cover the tax liability for their combined income.
The withholding calculator is located on the IRS Web site.
The W-4 forms are available on the payroll Web site. Completed W-4 forms should be returned to the Payroll Department at AQU 221.