Obama: Middle-class Americans should see tax cut help by April 1
It took only weeks for the notoriously slow Congress to pass the $787 billion economic stimulus package. President Barack Obama signed it into law less than one month into his presidency.
So when should most people hope to start seeing the benefits of tax cuts in it? By April 1, according to the president.
“Never before in our history has a tax cut taken effect faster or gone to so many hardworking Americans,” Obama said Saturday in his weekly radio and Internet address.
The president said his signature two-year “Making Work Pay” tax break will affect 95 percent of working families, and, in six weeks’ time, a typical family will start taking home at least $65 more every month.
Taxpayers won’t get a separate check mailed to them like many did with last year’s one-time payment designed by the Bush administration to help boost the economy.
Instead, Obama’s credit — up to $400 credit for individuals and up to $800 credit for married couples — is to be doled out through the rest of the year through paychecks. Most workers are to see about a $13 per week increase in their take-home pay. In 2010, the credit would be about $7.70 a week, spread over the entire year.
People who do not earn enough money to owe income taxes are eligible for the credit, an attempt to offset the payroll taxes they pay.
But the credit is phased out for higher-income taxpayers, defined as individuals who have a modified adjusted gross income of between $75,000 and $95,000, and married couples filing jointly who make between $150,000 and $190,000. Thus, the administration says many of them will see little or no change in their paychecks.
With employers and payroll companies responsible for making the necessary changes, no worker has to fill out a new W-4 withholding form or do anything else to get the credit. The Internal Revenue Service, however, is suggesting that individuals and couples with multiple jobs submit a revised withholding form to be on the safe side. And it’s always a good idea for people to keep a close eye on pay stubs to make sure their money is included.







