For 2009 and 2010 we had the Making Work Pay Credit and throughout both years there was less tax withheld from wages which was suppose to balance out at the time the tax return was filed. For 2011 the Making Work Pay Credit has expired so I assumed the amount of tax being withheld was going to be increased to offset the credit being done away with. Now I have read a recent email from the IRS that the withholding tables are not changing. Therefore taxpayers are not going to have enough withheld throughout the year to offset the loss of the credit when they file next year for 2011. Am I correct in this. If so I'm thinking I need to warn my customers ahead of time to be prepared for this.
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tHE WITHHOLDING
tables did change. The tax tables did not materially change.
Nearly everyone we do payroll had large increases in withholding and decreases in take home. We have had multiple phone calls about this and especially for pensions. They are upset their income is down, but it is all in withholding.AJ, EA -
No. The IRS was late with the new tables and payers were allowed to use the old ones in January, but are required to adjust one or more later payments in the first quarter to make the total correct using the new tables.Originally posted by Bonnie View PostComment
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I have had three clients lately who had federal tax withholding increase about $400 per
year which I assume was to overcome the elimination of the making work pay credit
for 2011.Comment
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Federal wh
Checked a pension withholding today and his went up $43 per month. TP does not and did not qualify for the MWP credit. Need to adjust his estimates accordingly. Did check some paystubs for the ss being withheld of other tp and the employer was wh at the old rate. When brought to their attention comment was When did that change?Comment
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Explains
This thread explains why one of my retirees on their DFAS pension just had an increase of almost $ 50 on the Federal Withholding effective March 1
Thanks,
SandyComment
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