President Obama has issued a target date for the adjusted withholding to begin as part of the stimulus package: April 1.
Obama mentioned the date in his weekly radio address, saying:
I’m pleased to announce that this morning the Treasury Department began directing employers to reduce the amount of taxes withheld from paychecks, meaning that by April 1st, a typical family will begin taking home at least $65 more every month.
The highly touted Making Work Pay Credit was part of Obama’s original campaign promises and was made law as part of the American Recovery and Reinvestment Act of 2009. The credit will provide up to $400 per individual worker and $800 per working married couple. The credit will be administered through cuts in withholding at the employer level. There are income restrictions, phase-outs, and eligibility requirements that apply.
Specifics of how the plan will work for the self-employed and lower-income families that might not have enough withholding to receive the full credit have not, to my knowledge, been made public. It’s widely believed that those taxpayers will be able to apply for the credit, which is refundable, come tax time (next year, people, next year!). I would agree that seems like the most logical solution.
So, come April, check your paychecks. You’ll likely see a few more dollars. But don’t check your mailboxes: no stimulus checks for working families this go-round.
I’ll post more details as they are made available. For more information about the credit and other stimulus package tax breaks, check out my prior article on the stimulus bill.