Making Work Pay Tax Credit

(WWLP) - If you have a job in the United States, congratulations! Starting today, you'll be getting a small raise.

Instead of a lump sum economic stimulus check of 600 dollars like last year, this year a new President Obama plan has the IRS instructing employers to withhold a less tax from each week's paycheck, leaving you with more cash in your wallet.

Obama is hoping a new tax break will infuse the US economy with 1.2 billion dollars in cash. Money that will now be available to workers every pay period thanks to a tax deduction called the "Making Work Pay Tax Credit." Tom Cannata of SGS Tax in Feeding Hills says you don't have to do a thing to collect...your employer does the paperwork. But the tax expert does have a tip that could save you some stress as you file for 2009.

"People need to be careful, if they have more than one job, or in a married couple if both spouses are working, so that they don't have insufficient holdings because if they take out less tax from both husband and wife check, then they could end up getting a lower refund check than normal, or possibly even owing some tax."

Cannata says each worker can expect around 13 extra dollars in each of their paychecks as a result of the program,. It's one of the fastest and broadest tax cuts in American history.

For the self-employed like Aquanett band member Ed Dupont...he can expect to pay a slightly lower tax rate when he files his 2009 taxes. "I think it's fair that everyone pays their correct taxes. but it's also great to get a break during this hard economic time."

In Massachusetts, 2.4 million working families will earn the refundable tax credit. That will amount to about 400 dollars a year for individuals, and 800 a year for married taxpayers. The savings will show up on your 2009 W2.