Compliance February 24, 2009

IRS Releases Tax Withholding Tables to Reflect Stimulus Bill Provision

February 24, 2009 (PLANSPONSOR.com) - The Internal Revenue Service has released new withholding tables that incorporate the new "Making Work Pay" credit - a provision of the American Recovery and Reinvestment Act of 2009.
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The “Making Work Pay” provision dictates that workers receive a rebate/credit for the 2009 and 2010 tax years of the lesser of $400 for individuals and $800 for couples, or 6.2% of earned income.  The credit will be received by workers in their net paycheck through adjusted tax withholding tables (see Stimulus Provisions Mean Payroll Considerations ),

In an announcement, the IRS asks that employers start using the new withholding tables as soon as possible but not later than April 1. Workers will not need to fill out a new W-4 withholding form to get the “Making Work Pay” credit.

According to the announcement, the new withholding tables, along with other instructions related to the new tax law, will be incorporated in new Publication 15-T which will be posted to the IRS Web site next week and mailed to more than nine million employers in mid-March.

The new tables and instructions are also here .

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