The Recovery and Reinvestment Act

The Recovery and Reinvestment Act signed on February 17th by President Obama will boost the take-home pay of employees through the Making Work Pay provision. The increase will phase out for taxpayers with an adjusted gross income in excess of $75,000, or $150,000 for married couples filing jointly. Eligible workers will get the benefit of this change without any action on their part. A Form W-4 will not need to be submitted for the automatic withholding change, however, individuals and couples with multiple jobs may want to submit revised Form W-4 forms to ensure enough withholding is held to cover the tax for their combined income. MPAY Services’ tax tables were updated on the morning of February 24th so employees will begin seeing an increase in their take-home pay as early as this week.

For further information on the Making Work Pay provision or the American Recovery and Reinvestment Act, you may visit the IRS newsroom at http://www.irs.gov/newsroom/article/0,,id=204335,00.html?portlet=6.