Ask the taxgirl: Making Work Pay Credit for Married Couple

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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