The Federal government has been endeavoring to stimulate the economy for the past several years. There is a new (income) tax credit that is available to taxpayers when they file their 2009 Federal tax return. It is obtained by completing Schedule M and submitting it with your tax return. USA Today recently reported that if you do not complete this schedule the Internal Revenue Service will review your return and determine your eligibility. However, the processing of your tax return (and possible refund) will be delayed by two to three weeks.Â
The Making Work Pay tax credit is a new credit worth up to $400 for individuals and $800 for married couples that was established by the American Recovery and Reinvestment Act of 2009. Millions of hardworking Americans have already received the benefit of this credit every pay period through reduced tax withholding.
Some beneficiaries of Social Security, Veterans and Railroad Retirement programs, may have also received a $250 one-time Economic Recovery Payment in 2009. Early tax filing trends indicate that some working taxpayers who received the Economic Recovery Payment, and are also eligible for the Making Work Pay tax credit are slowing down their tax refunds by not properly reporting the $250 payment on their tax returns. Anyone who received the one-time Economic Recovery Payment must reduce the Making Work Pay credit they claim by the amount of the one-time payment.
To find out if you received a 2009 Economic Recovery Payment, please call our automated telephone service at 1-866-234-2942 and select Option 1. Starting March 23, 2010, use the Did I Receive a 2009 Economic Recovery Payment? online tool to verify whether you received the payment.
You can be sure to properly account for the Economic Recovery Payment by properly reporting it on IRS Schedule M when you claim the Making Work Pay tax credit. If you received a one-time payment, but do not report it on your return, it will slow your refund. For more information see the instructions to Schedule M.
Additional information on this same topic follows:
Six Things You Need to Know About Your Economic Recovery Payment
Did you receive a $250 Economic Recovery Payment in 2009? You’ll need to know if you are claiming the Making Work Pay Tax Credit on your 2009 tax return.
Only individuals who received income from the Social Security Administration, Department of Veterans Affairs and Railroad Retirement Board received a $250 Economic Recovery Payment.
If you received benefits from one or more of these agencies, but you are unsure if you received the $250 Economic Recovery Payment, you can find out by using the “Did I Receive a 2009 Economic Recovery Payment?” feature online at IRS.gov or by calling 1-866-234-2942. These tools give you an easy way to verify if you received the one-time Economic Recovery Payment and which agency made the payment. These payments must be included when claiming the Making Work Pay Tax Credit on 2009 tax returns.
Here are six tips from the IRS that will help you determine if you received an Economic Recovery Payment:
- If you had earned income in 2009 or are a government retiree and received an Economic Recovery Payment you need to report the payment and the amount when claiming the Making Work Pay and Government Retiree Credit on Schedule M, Making Work Pay Credit and Government Retiree Credits or as you complete your return using e-file software.
- The Economic Recovery Payments are not taxable income; however, anyone who receives social security, veteran or railroad retirement benefits, as well as certain other government retirement benefits, must reduce the Making Work Pay Tax Credit they claim by the amount of any payment they received in 2009.
- To verify whether you received the $250 payment, you can call 1-866-234-2942 and select Option 1 to access the “Did I Receive a 2009 Economic Recovery Payment?” telephone feature.  The online version for verifying your Economic Recovery Payment will be available on IRS.gov in mid-March.
- When using the “Did I Receive a 2009 Economic Recovery Payment?” feature to determine if you received an Economic Recovery Payment, you must provide your Social Security number, date of birth and zip code from your last filed tax return.
- You must make a separate inquiry for each person on the tax return when using the “Did I Receive a 2009 Economic Recovery Payment?”, even if you are filing a joint tax return.
- Not claiming the Economic Recovery Payment on the Schedule M can delay the processing of your tax return. To avoid delays be sure to use the “Did I Receive a 2009 Economic Recovery Payment?” feature to find out if you received the payment.Â
More information about the Economic Recovery Payment and the Making Work Pay Tax Credit can be found at IRS.gov/recovery. Schedule M and the related instructions can be obtained at IRS.gov or can be ordered by calling 800-TAX-FORM (800-829-3676).Â
Links:
- Did I Receive a 2009 Economic Recovery Payment?
- Economic Recovery Payment
- Making Work Pay Tax Credit
- The American Recovery and Reinvestment Act of 2009: Information Center
- Schedule M, Making Work Pay Credit and Government Retiree Credits
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