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Making Work Pay

In 2009 and 2010, the Making Work Pay provision of the American Recovery and Reinvestment Act will provide a refundable tax credit of up to $400 for working individuals and up to $800 for married taxpayers filing joint returns.

This tax credit will be calculated at a rate of 6.2 percent of earned income and will phase out for taxpayers with modified adjusted gross income in excess of $75,000, or $150,000 for married couples filing jointly.

For people who receive a paycheck and are subject to withholding, the credit will typically be handled by their employers through automated withholding changes in early spring. These changes may result in an increase in take-home pay. The amount of the credit will be computed on the employee’s 2009 income tax return filed in 2010. Taxpayers who do not have taxes withheld by an employer during the year can also claim the credit on their 2009 tax return.

Incentive for First Time Homebuyers

House Bill 261

On May 11, Georgia Governor Sonny Perdue signed House Bill 261 allowing  a tax credit for homes purchased between June 1, 2009 and November 30, 2009. The credit is the lesser of $1,800 or 1.2 percent of the purchase price and it is not limited to first time homebuyers.

To qualify for this credit, the home:

  • Must have been for sale prior to May 11, 2009 and still be held for sale, or
  • Must have been in default or already foreclosed upon and held by a bank or mortgage company on or before March 1, 2009.

This credit can be used in addition to the First Time Homebuyer credit, allowing first time home buyers in Georgia potential combined credits of up to $9,800.

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