Sorting out items in the American Recovery and Reinvestment Act — the economic recovery package signed by President Obama — one promises help to over 1.1 million Iowans.
The Making Work Pay Credit is a tax credit of up to $400 per worker. It is available to all workers earning up to $95,000 and married couples earning up to $190,000. There are other elements to it; the credit:
- • phases in at the same rate as Social Security taxes
- • is reduced by the amount (if any) of the family’s Economic Recovery Payment, a one-time payment of $250 for recipients of Social Security, SSI, and certain other benefits.
- • doesn’t apply to workers claimed as dependents by other taxpayers.
According to the Brookings/Urban Tax Policy Center, 110.7 million taxpayers nationwide are eligible for the credit. In Iowa, this is estimated to cover 1,113,000 taxpayers.
The Making Work Pay Credit is not the only credit targeting help to working families at lower incomes. Some families — those with children and low or moderate incomes — also will receive help through expansions in the Earned Income Tax Credit and Child Tax Credit.
Source of data: Arloc Sherman, Center on Budget and Policy Priorities, “Tax Aid in Recovery Package Would Reach Large Numbers of Workers in Every State.” Updated Feb. 26, 2009. http://www.cbpp.org/1-21-09tax3.htm
