Discussion:Making Work Pay Credit 2009

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Discussion Forum Index --> Basic Tax Questions --> Making Work Pay Credit 2009

Discussion Forum Index --> Tax Questions --> Making Work Pay Credit 2009

Sheri414 (talk|edits) said:

11 November 2011
For year 2009, client received a government pension and spouse had income from self-employment. Husband received the $250 economic recovery payment during the year and the wife did not. When we filed their 2009 income tax return, on schedule M, wife received the $250 credit. Yesterday, they received a letter from the IRS stating that due to IRS error, the Making Work Pay and Government Retiree Credit should have been reduced by the Economic Recovery Payment they received and informed them that they must repay the $250 credit. It was my understanding that both spouses received the credit. Does anyone know why the IRS is only allowing one $250 payment? Has anyone else received a similar letter? They are not charging any penalties or interest because they claim it is their mistake; I'm wondering if the rules changed after the credit was implemented?

Solomon (talk|edits) said:

11 November 2011
"Does anyone know why the IRS is only allowing one $250 payment?"

No double dipping permitted - Economic Recovery Payment received.

Nightsnorkeler (talk|edits) said:

11 November 2011
The Making Work Pay credit is calculated using the earned income of the taxpayer(s), less any Government Employee Credit and stimulus payment received by recipients of Social Security, SSI, railroad retirement and Veteran's disability compensation or pension benefits.

How much earned income did the wife have? Calculate the maximum credit based on earned income and subtract the $250 received. The result is the amount of credit that they should have received on their 2009 tax return. The only way that the credit on the return would be $250 is if the earned income on the return was $8,065. ($8,065 * .062 = $500 - $250 = $250)

Jake (talk|edits) said:

17 February 2012
The making work pay credit was up to $400 each for earned income and $250 for those on Soc Sec or receiving a Govt. Pension.

Client just got a similar letter for 2009. They file separate returns because Ohio income tax is a lot less. Federal tax the same. Husband, no earned income, gets Social Security, got $250 check directly so -0- on Schedule M [AGI about $30,000] Wife, no earned income, has Ohio govt.pension, claimed $250 credit. [AGI about $35,000 so that's not an issue] Proseries calculated that automatically. Now IRS wants her $250 back plus $17 interest. If it is limited to one per married couple then I am going to have a lot of clients getting such letters. But I am 99% sure that is not the case. [In 2010 the $250 for those on Govt Pensions was eliminated - I remember there were a lot of clients complaining about that!]

Jake (talk|edits) said:

22 February 2012
In original post I said "spouse had income from self-employment" I meant that "spouse has soc sec benefit based on self employment". Discussed this with IRS - IRS says that the SS Admin reported that the SS Admin had paid $250 to this taxpayer. This taxpayer does not have enough quarters to get any social security pension. Taxpayer only receives a State Govt. Pension. But after reporting this to the taxpayer, the taxpayer did discover that a $250 check was received from Social Security in 2009 (in addition to the $250 that the taxpayers's spouse also got.) Can't double dip - same person cannot get $250 from Soc Sec and another $250 from govt. pension. Question resolved. But what I don't understand is how this taxpayer who does not get any soc sec pension qualified to get the $250 from soc sec. Taxpayer also got $250 in 2010 from Soc Sec. In 2010 the making work pay $250 did not go to Govt. Pension recipients - only to soc sec recipients. Taxpayer does have/pays for Part B Medicare coverage. Maybe that is the reason.

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