Taxpayers to Get Rude Surprise Next Spring
Friday, May 01, 2009
By Stephen Ohlemacher, Associated Press
Washington (AP) – Millions of Americans enjoying their small windfall from President Barack Obama’s “Making Work Pay” tax credit are in for an unpleasant surprise next spring.
The government is going to want some of that money back.
The tax credit is supposed to provide up to $400 to individuals and $800 to married couples as part of the massive economic recovery package enacted in February. Most workers started receiving the credit through small increases in their paychecks in the past month.
But new tax withholding tables issued by the IRS could cause millions of taxpayers to get hundreds of dollars more than they are entitled to under the credit, money that will have to be repaid at tax time.
At-risk taxpayers include a broad swath of the public: married couples in which both spouses work; workers with more than one job; retirees who have federal income taxes withheld from their pension payments and Social Security recipients with jobs that provide taxable income.
All I can say is: Surprise!
The article goes on to talk about some of the issues involved, including those for retirees. The people hurt the worst will actually be to those on the cusp between one tax bracket and the next. I’m afraid, they’ll likely get a double whammy at the end of the year.