County Supervisor Neil Derry has issued an alert, warning seniors and two-paycheck households about the possibility of overpayment of the “Making Work Pay” tax credit, which is part of the new federal economic stimulus package. Single taxpayers will be eligible for a credit up to $400, married couples will receive up to $800; however, some many be ineligible for this credit or will receive a larger-than-allowed stimulus payment each pay period. According to Supervisor Derry, “Many taxpayers count on their annual refunds and expect it to be a certain amount. I am concerned that some folks will be caught off-guard and owe money to the IRS. In these tough economic times, a few hundred dollars can really put a lot of stress on a family.” Those who are likely to run into problems and receive a larger-than-allowed credit are couples with two working spouses (earning over $150,000), workers holding two jobs at one time, dependents, retirees having taxes withheld from their pension payments, and those who are working and receiving Social Security benefits. Adds Derry, “I am deeply concerned that some of our seniors might be in for a rude awakening at tax time. We need to educate and inform our seniors and single parents that might be working two jobs to keep food on the table.” Individuals with questions about their specific situation are encourged to contact a tax professional or call the automated IRS information line at 800/829-1040.
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