Schedule M

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There are two tax credits available for 2009, which may decrease your tax liability or increase your tax refund. You must state both of these credits on a Schedule M. The credits are the Government Retiree Credit and the Make Work Pay Credit. The Make Work Pay credit will need to be reported on your 2009 income tax return, although it was given to most employees through a reduction of their withholding in 2009.

The Make Work Pay Credit amounts a maximum of $800 for married couples and $400 for those registering as single. The Make Work Pay Credit is 6.2% of made income up to the maximum. Any married couple whose joint income totaled $12, 903 or more during 2009 qualified for a withholding decrease of $800. Any single filer whose income totaled $6,451 or more during 2009 qualified for a withholding deduction of $400.

Freelance persons must calculate the credit using their net profit or loss from their business. Some taxpayers will need to make extra calculations if they have wages from work performed as a prison inmate, wages earned as foreign income or a net loss on their business. Instructions for such calculations are available from the IRS and on Schedule M, itself.

You did not qualify for the Make Work Pay Credit if you are a single filer whose modified adjusted gross income was $95,000 or more, joint filers whose modified adjusted gross income was $190,000 or more, anyone who may be claimed as a dependent on someone’s tax return, taxpayers without a valid Social Security number and non-resident aliens.

The Government Retiree Credit is organized to offer a tool of economic relief to those government retirees who did not qualify for the 2009 economic recovery payment. Retired claim, local, or federal employees who received pensions in 2009 based on work not covered by Social Security are qualified for the Government Retiree Credit. This is $250 for single filers and $500 for joint filers. You cannot state the Government Retiree Credit if you got an economic recovery payment.

OVGuide

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