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How much of a tax break will I see in my paychecks? The IRS answers.
Feb 24, 2009 12:56 PM

The Internal Revenue Service on Tuesday released new tables to show how much of your paychecks will be withheld after the tax breaks from the economic stimulus bill go into effect.

Included in the $787 billion stimulus package was the Making Work Pay Tax Credit, which for 2009 and 2010 will provide a refundable tax credit of up to $400 for working individuals and $800 for married taxpayers.

The amount withheld for taxes depends on your individual income and exemptions, so check the details at IRS.gov.

Here is a sample of withholding rates broken down by annual income:

IRS: New tax withholding tables


What do you have to do? The IRS announcement says nothing, for now.

Eligible workers will get the benefit of this change without any action on their part. This means that workers don’t need to fill out a new W-4 withholding form to get the Making Work Pay credit reflected in their take-home pay. A Form W-4 will not need to be submitted for the automatic withholding change. Individuals and couples with multiple jobs may want to submit revised Form W-4 forms to ensure enough withholding is held to cover the tax for the combined income.

Taxpayers will not get a separate, special check mailed to them from the IRS like last year’s economic stimulus payment, according the IRS, but the benefit will generally be spread out over the paychecks they receive beginning this spring and continue until the end of the year.

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