We like Mondays at our work place! Why? Because Monday is payday! But today is a special day for us, because as of April 1, 2009, President Obama's "Making Work Pay" provision of the American Recovery and Reinvestment Act kicks in and that means an increase in take home pay.
I just completed our company's payroll, and all the employees (we have so many LOL) have less federal taxes withheld from their gross wages. Today will be our first paycheck with an increase in take home pay! It's not a huge amount for anyone, but it's better than nothing. We'll take it!
If you are paid hourly instead of a salary, then it may be difficult to know that you are actually now receiving this stimulus benefit. Your employer should be using new updated withholding tables. A lot or most employers use some type of payroll software, and they must update their software with these new withholding tables. Don't hesitate to ask your employer about this, if you feel your federal tax withholding may not be the correct amount!
The American Recovery and Reinvestment Act of 2009 (Stimulus Bill) is intended to provide a stimulus to the U.S. economy in the wake of the economic downturn brought about by the sub prime mortgage crisis and the resulting credit crunch. The $787 billion economic stimulus plan was signed into law by President Obama on February 17, 2009.
Some of the provisions in the plan that have a significant impact on payroll and payroll taxes are "Making Work Pay" tax credits and COBRA premium assistance credit.
The Making Work Pay tax credit provides credit of up to $400 per person ($800 per family) against their 2009 and 2010 taxes. The IRS has released new payroll withholding tables and is asking employers to apply the new tables as soon as possible, but no later than April 1, 2009.
Click the title link for the IRS page on "The Making Work Pay Tax Credit."
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UPDATE: Since I have posted this blog entry, it has received hundreds of hits and ranks very high on search engines! I never expected that, but I welcome all the new traffic and hope the link provided you with the information you were looking for.
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