| Most wage earners will benefit from larger paychecks | | | | If you wind up owing tax because too little was taken |
| in 2009 and 2010 as a result of the changes made to | | | | out of your paychecks during 2009, you may qualify |
| the federal income tax withholding tables to implement | | | | for special relief on a penalty that sometimes applies. |
| the Making Work Pay tax credit. However, some | | | | If you believe your current withholding is not |
| people may find that the changes built into the | | | | appropriate for your personal situation, you can |
| withholding tables result in less tax being withheld than | | | | perform a quick check using the IRS withholding |
| they prefer. | | | | calculator. If you are not familiar with the withholding |
| If you're not eligible for the Making Work Pay tax | | | | calculator, watch this IRS how-to video for instructions. |
| credit, withholding changes could mean a smaller | | | | When you have determined your correct withholding, |
| refund next spring. A limited number of people, including | | | | make any adjustments by filing a revised Form W-4, |
| those who usually receive very small refunds, could in | | | | Employee's Withholding Allowance Certificate, with |
| some situations owe a small amount rather than | | | | your employer. |
| receiving a refund. Those who should pay particular | | | | Pensioners |
| attention to their withholding include: | | | | Pensioners do not qualify for the Making Work Pay |
| * Pensioners (see more information under Pensioners, | | | | credit, unless they receive earned income. However, |
| below) * Married couples with two incomes * | | | | because the 2009 and the 2010 withholding tables also |
| Individuals with multiple jobs * Dependents * Some | | | | apply to pensioners, the IRS has provided pension |
| Social Security recipients who work * Workers without | | | | plans with an optional adjustment procedure. If you are |
| valid Social Security numbers | | | | a pensioner with questions about your withholding, |
| The Making Work Pay tax credit, normally a maximum | | | | contact your pension plan administrator. |
| of $400 for working individuals and $800 for working | | | | If desired, pensioners can adjust their withholding by |
| married couples, is reduced by the amount of any | | | | filing Form W-4P, Withholding Certificate for Pension or |
| Economic Recovery Payment ($250 per eligible | | | | Annuity Payments. |
| recipient of Social Security, Supplemental Security | | | | Self-Employed |
| Income, Railroad Retirement or Veteran's benefits) or | | | | Self-employed individuals can also benefit now from |
| Special Credit for Certain Government Retirees ($250 | | | | the Making Work Pay tax credit by evaluating their |
| per eligible federal or state retiree) that you receive. If | | | | expected income tax liability, allowing for this tax credit |
| you are affected by this reduction, you should review | | | | if they are eligible, and making the appropriate |
| your withholding to ensure that sufficient funds have | | | | adjustment in the amount of their regularly scheduled |
| been withheld to meet your tax obligation. | | | | estimated tax payments. |