Taxpayer asks:
Are we getting a second check in 2009?
Taxgirl says:
Not exactly.
Beginning in April, employers will begin adjusting your withholding under the Making Work Pay Credit, giving you a few extra dollars in your paycheck. Phaseouts apply.
Later in the year, those who are disabled or retired will receive a small check in the mail since they do not qualify for the Making Work Pay Credit.
Those who are self-employed will be able to apply for the credit on next year’s tax forms. I haven’t seen drafts of the forms yet so I’m not sure about the specifics.
If you do not work, you are not eligible for the credit. And, unlike last year’s credit/check, the number of children that you have will not influence the amount of your credit, something many in Congress are glad about. You may remember that the initial version of the stimulus check bill under President Bush capped the credit based on dependents at three children, while the final version did not have a cap. This had the unfortunate consequence of having taxpayers with dependents come out of the woodwork in 2008 in order to claim several dependents on their return.
To recap, those who are employed will see the most benefit, unless you are phased out due to income restrictions (phase-outs would allow partial credit for individuals up to $100,000 and couples earning up to $200,000). The credit is refundable, so if you don’t receive all of it due to withholding and you otherwise qualify, you can claim it on your 2009 tax return. No checks will be mailed during 2009 except for those who are retired or disabled.
Before you go: be sure to read my disclaimer. Remember, I’m a lawyer and we love disclaimers.
If you have a question, here’s how to Ask The Taxgirl.
