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Tax Credits for Working People
There are two tax credits designed to help out low and modest income wage earners.
The Earned Income Tax Credit is for working individuals and families and can put money (up to $5,000) back into your pocket at the end of the year. Another tax credit, the Making Work Pay Credit, is new and can put money into your pocket now. Single people will get around $400 extra back, while married people will get up to $800 extra back, distributed in their paychecks throughout the year.
Do you work and qualify for these tax credits?
| Earned Income Tax Credit | Making Work Pay Tax Credit |
Earned Income Tax Credit
For people with wages, salaries, tips, self-employment income and other earnings, the EITC gives $500 to households with no children and up to $5,000 to households with children. There are restrictions on how much income a taxpayer can earn to qualify.
Even if you aren’t required to file a tax return, you need to file to get this credit. In many cases, you will get money back!
Making Work Pay Tax Credit
Throughout the year, this tax credit provides $400 for working individuals and an $800 credit to working married couples who file a joint tax return.
Like the Earned Income Tax Credit, the Making Work Pay Tax Credit is also designed to encourage people to work. However, the Making Work Pay Credit is added automatically to your paycheck each pay period, so there is no need to apply for it. If you are working, you are already getting this valuable tax credit!
I'm aware of the EITC credit, but the Making Work Pay Credit is new to me.