Don't Forget About the Making Work Pay Credit

With all the press surrounding the new payroll tax holiday for 2011, it's easy to forget about the Making Work Pay Credit. The credit, which was the cornerstone of President Obama's economic stimulus plan, was replaced by the new payroll tax holiday.




Unlike the new payroll tax holiday, the number of taxpayers eligible for the Making Work Pay Credit is limited. The credit was intended to provide tax relief for working and middle class families, so phase-outs apply at the top. In addition, since the idea of the credit was to provide an incentive to work, taxpayers must have earned income, meaning wages from working, to qualify for the credit.