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March 8 paychecks should reflect changes
in tax withholding from stimulus act

Middle income workers across America and in Idaho may be among the first to benefit from the American Recovery and Reinvestment Act (the stimulus act) Congress passed last week.

ITD Controller Gordon Wilmoth issued a memo Thursday to employees indicating that new tax rates will be evident in March 6 paychecks covering time worked from Feb. 8 to Feb. 21. The net result of the Making Work Pay credit will be an increase in take-home pay for most employees.

Additional information will be passed on to ITD employees when it is available from the Internal Revenue Service.

The maximum credit is $800 for a married couple filing a joint return and $400 for other taxpayers.

Most workers will qualify for the maximum credit, according to an IRS news release. The credit will be phased out for higher income taxpayers.

“Because the credit is refundable (people can get it even if they owe no tax), most low-income workers will also qualify for the full credit,” IRS officials say.

Wilmoth said employees don’t need to change their W-4 form to receive the credit, “but some employees may want to revise it to ensure enough taxes will be taken out for the year.”

See the Wilmoth’s memo and the IRS news release