An important tax credit offered by the Federal government may expire at the end of December if it isn’t extended. Also known as the Making Work Pay tax credit, it has given workers up to $33 extra in their paychecks each month and could be dearly missed by employees if allowed to expire.
Making Work Pay Tax Credit Has Been Beneficial
Since the beginning of 2009, workers have benefited from this tax credit, which offers $33 extra per month for single filers, $67 per paycheck total more for joint filers or a $400 (single filers)/$800 (joint filers) tax credit for the entire taxyear.
More than 90 percent of working Americans have come to rely on the extra money each month in this tough economy as it helps them pay for groceries or even small bills. The credit is set to expire on December 31, leaving many wondering what will happen in the new year.
Credit Extension Possible but Not Probable
Senate Finance Committee panel chairman Max Baucus (D-Mont.) recently stated that they are working on a proposal to extend a number of tax breaks when Congress returns next week. The Making Work Pays credit is reportedly included in this group.
Aside from this possible review next week, there has been nothing concrete discussed regarding the credit aside from Obama proposing its extension months ago with no real fight for it since then.
In a recent CNN Money article, Clint Stretch, managing principal of tax policy at Deloitte Tax, was interviewed. He expressed his belief that the credit is likely on its way out because he had not seen any serious effort to extend it. Since it is not proving to be a priority, it’s probable that it will be ushered out in 2011.
While the recession is reportedly over and we have seen small signs of economic improvement here and there, many people are still unemployed while those who work are still in need of additional aid. Hopefully, the government will take time to review the benefits of the credit so that hard-working Americans will have monetary relief for at least another year.