Created by the American Recovery and Reinvestment Act of 2009, the Making Work Pay credit, normally a maximum of $400 for singles and $800 for couples filing jointly, is refundable. This means you can get it even if you owe no tax. Filers need to be aware that they still need to claim this credit when filing taxes. In fact, it was one of the most overlooked tax credits last filing season, meaning an increased tax liability or decreased refund for taxpayers.
Because the Making Work Pay Credit was built into the withholding tables for 2009 and 2010, most workers benefited from larger paychecks. However, a few taxpayers - including those who usually receive very small refunds - could owe a small amount rather than receiving a refund. Consult an H&R Block tax professional to determine if you are missing other tax credits or deductions on your tax return this year.
Some taxpayers who received the one-time economic recovery payment need to reduce their credit by the amount of this payment. For details or to find out if you received one of these payments during 2010, visit the Economic Recovery Payment page at IRS.gov.