Drake Tax Software for 2010 has a schedule M Making Work Pay Credit form which asks for the amount of Economic Recovery Payment received in 2010. I believe that no one received such an Economic Recovery Payment in 2010. Included on that credit form in Drake Tax Software is a website where we can go to determine how much was received but presently it only shows amounts received in 2009. Must we go through the same tedious check again this year as we did last year to detemine if our client received any such money during 2010? I believe that this is the last year for the allowance of this credit. This means that for 2011 and subsequent years the tax for many taxpayers will increase by up to $800.
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The $250 economic recovery payments to people receiving benefits from Social Security, SSI, railroad retirement, and veteran’s disability was for 2009 only. Those payments were not suppose to be paid to beneficiaries in 2010. So there is no reduction in the Making Work Pay credit for 2010. There was a $250 rebate paid to Medicare part D enrollees for those who entered the coverage gap (Medicare donut hole) in 2010, however, there is nothing to indicate those benefits reduce the Making Work Pay credit for 2010. They do, however, reduce the amount of 2010 medical expenses deductible on Schedule A as an itemized deduction. -
re: the donut hole amount of $250. i saw somewhere that turbotax is using that amount on schedule M to reduce the making work pay credit. i was going to post question here to see if anyone here knew what will happen with that $250Comment
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The donut hole amount does NOT reduce the Making Work Pay Credit.
The 2010 Schedule M draft version dated 6/29/2010 has the following description for line 10:
Apparently, some who were supposed to get their 2009 payment did not actually receive it until 2010. Thus, there is a line on the 2010 Schedule M to accommodate those folks.Did you (or your spouse, if filing jointly) receive an economic recovery payment in 2010? You may have received this payment in 2010 if you did not receive an economic recovery payment in 2009 but you received social security benefits, supplemental security income, railroad retirement benefits, or veterans disability compensation or pension benefits in November 2008, December 2008, or January 2009 (see instructions).Comment
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Don't Count on it
You are correct if it doesn't get extended, or made permanent. The one thing the govt will not tolerate will be an increase in withholding on zillions of workers. And this will happen in January if the MWP credit is not extended. This will be true even if the Bush Tax Cuts are extended.Originally posted by dyne View Post
The withholding effect of MWP is appx $16/week. Our politicians will sell their souls before they get blamed for this.Comment
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They could always let it expire at the same time a payroll tax holiday kicks in.Originally posted by Snaggletooth View PostComment
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MWP credit
I think it is due for exctinction 12/31/10, since this latest consensusOriginally posted by LCP View Post
(by no means certain finally!) is a reduction of 2% of FICA tax on workers. Remember the MWP credit was for the entire 6.2% FICA tax.ChEAr$,
Harlan Lunsford, EA n LAComment
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Harlan
I think the MWP is the reduction in withholding tax tables amount - the 6.2% credit is for HIRE (hiring previously unemployed)?Comment
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No one noticed the decrease in withholding....no one would notice the increase either. I'm really sick of this crappy stuff that really does nothing but make our lives more complicated.Comment
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Notice, Luke, that the computation of the MWP credit is based onOriginally posted by luke View Post
6.2% (the fica amount) of wages up to $ 400/800.
So that is why I think there can be no "overlap".ChEAr$,
Harlan Lunsford, EA n LAComment
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Ok
Harlan - this is why I dont like to comment on "proposals" - "bills" until they become law - too CONFUSING...Comment
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