Tax Return

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Complete Schedule M if you received Making Work Pay credit

20th April 2010 by Tax Man No Comments

Tax day is almost upon us, and many taxpayers are wondering what Schedule M is and whether they need to fill it out on their tax return. It relates to the Making Work Pay tax credit, where qualifying individual filers receive $ 400 and qualified couples receive $ 800. So that people could get that money as soon as possible, payroll withholding tables were adjusted to reduce the amount of federal taxes taken out of paychecks, says MSN MoneyCentral. Unfortunately, the few extra dollars per paycheck was so small (not quite same day loans) that many workers didn’t notice. Extra spending to stimulate the economy didn’t happen as politicians hoped, and there also some confusion regarding Schedule M as it relates to the Making Work Pay stimulus (See NY Times source).

Taxpayers donâ€™t know if Schedule M is something they have to complete or not

This is very important, says MoneyCentral: If you received the Making Work Pay tax credit, you must fill out Schedule M. Essentially, the Making Work Pay tax credit isn’t credited to you until you claim it on your return. This is something more than 4 million 2009 tax filers so far have gotten wrong, according to the IRS. They are fixing the mistake, which will slow down the overall process of reviewing returns. This in turn means that it will take longer for people to receive their refunds.

The place Schedule M goes on your tax return

Look at page 2 of your 1040 form. In the “payments” section (lines 61 through 71), the Making Work Pay tax credit amount belongs on line 63. It seems to be on the same place for the 1040A form. With the 1040-EZ, Schedule M will be on the back of the form using the worksheet. Filers calculate the Making Work Pay tax credit amount on Schedule M and transfer the result to line 63, says MoneyCentral. It isnâ€™t like payday loans, but is a welcome sight to employed American taxpayers that need a little relief during the recession.