Taxpayer asks:
If you are married and did not work, but your spouse earned $156,00, are you entitled to $800 credit or $400 for the working spouse?
Taxgirl says:
Your comma threw me – so I’ll answer it both ways.
If your spouse earned $15,600 and you file married jointly, you would be entitled to the $800 credit assuming that you otherwise qualify.
If, however, your spouse earned $156,000 and you file married jointly, you would not be entitled to the full credit. You’d be phased out to the tune of 2%. The phase-out works this way for married couples: subtract your qualifying income from $150,000 and multiply by 2%; subtract that amount from the full credit. If your income were $156,000, you’d have a credit of $680. Here’s the math:
$156,000 – $150,000 = $6,000
$6,000 x 2% = $120
$800 – $120 = $680
The result is that you’re totally phased out at $190,000 for married taxpayers filing jointly.
The key to remember is that the total credit for married credits is $800 irrespective of individual income. One quick caveat: if either spouse received an Economic Recovery Payment, you’ll deduct that amount from the full credit.
Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.
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{ 11 comments… read them below or add one }
Be sure to be correct about whether you did or did not receive a stimulus payment. Turbo tax assumed I did because I started SS during the year and I failed to correct it. My efile was rejected by the IRS, I had to correct and try again.
I have a situation where neither the taxpayer or spouse has W-2 wages, but they both have other forms of earned income. The taxpayer has $12,761 of earned income from his Schedule C business and $60 of income from an estate distribution, while the taxpayer’s spouse has a ($30,251) loss from farming on Schedule F. In this instance, our CPA firm assumed that the taxpayer would not be eligible for the MWP Credit due to netted negative earned income.
However, the taxpayer received a notice from the IRS informing him that he was entitled to a $778 refund because he had not taken the MWP credit. Can you explain how he is still entitled to the MWP Credit or if this is an IRS mistake?
Joel, my quick answer is that I believe that simply being a form W-2 wage earner qualifies the taxpayer regardless of the Schedule C.
Neither the taxpayer or spouse has W-2 wages, and the husband’s Schedule C and wife’s Schedule F are the only forms of earned income.
After doing thorough research since my last post, I believe that the notice sent by the IRS is an error. The Schedule M worksheet for non-W-2 wage earners specifically states at the top, “If married filing jointly, include your spouse’s amounts with yours when completing this worksheet”.
I started get SSI because of my age 66, I’m still working, my wife haven’t work in 2 year. My question is how is my tax per filing this year/last year with IRS, Thanks
KEN, it sounds like you would have been eligible for the Economic Recovery Payment but not the Making Work Pay Credit. To receive the Making Work Pay Credit, you have to have earned income.
I received $800 in my tax return last year, because I filt jointly, but ,this year I use Turbotax. They take only $500 instead of $800. can you tell me why?
Thank you
I only have military retirment income (1099R) I am too young for social security income. I did receive the economic recovery payment. Do I qualify for the work pay credit
Matt, obviously I don’t know all of the circumstances at play here but if you do not have earned income, you do not qualify for the Making Work Pay Credit. Retirement income is not considered earned income. So if that’s your only income, the answer is no.
I am self employed individual. I received $ 250/- in May 2009.Tell me
if I can take credit for making work pay in Form SE (2010) Return ?
Last year I did not claim the “making work pay” credit and the irs figured if for me —-and told me do it myself for 2011 on Schedule M (I can only find schedule M for 2010) —-but it tells me to enter the credit amt on line 63 of form 1040 —that doesn’t seem right —-since this is a credit. Can you advise on where I should enter it —-maybe under credits?? —-or what
thanks, ernest