<p>I was working on my return and printed out a preliminary packet and there was a schedule M form that gave us an $800 tax credit. I was curious as to what this was so I did some digging and it was just one of the giveaways in the ARRA last year. This morning I was thinking about it and realized that our son would be able to claim this. He made about $7,400 which is about $2,000 above the threshold for where he wouldn’t have to pay any taxes. This little credit may get him back to not having any tax liability (he’d get a refund).</p>
<p>I still have to determine if he can write off $1,600 of the income as a housing expense as it was at a distant university.</p>
<p>That one surprised me too. I thought it was a mistake, as I didn’t recall doing anything so important as “Making America Work.” Well, maybe some of my shopping…we all contribute in our own way :)</p>
<p>Was he your dependent? If so, I don’t think he’s entitled to the credit.</p>
<p>From the IRS:</p>
<p>"Most wage earners will benefit from larger paychecks in 2009 and 2010 as a result of the changes made to the federal income tax withholding tables to implement the Making Work Pay tax credit. However, some people may find that the changes built into the withholding tables result in less tax being withheld than they prefer. </p>
<p>If you’re not eligible for the Making Work Pay tax credit, withholding changes could mean a smaller refund next spring. A limited number of people, including those who usually receive very small refunds, could in some situations owe a small amount rather than receiving a refund. Those who should pay particular attention to their withholding include:</p>
<p>Pensioners
Married couples with two incomes
Individuals with multiple jobs
Dependents
Some Social Security recipients who work
Workers without valid Social Security numbers</p>
<p>The Making Work Pay tax credit, normally a maximum of $400 for working individuals and $800 for working married couples, is reduced by the amount of any Economic Recovery Payment ($250 per eligible recipient of Social Security, Supplemental Security Income, Railroad Retirement or Veteran’s benefits) or Special Credit for Certain Government Retirees ($250 per eligible federal or state retiree) that you receive. If you are affected by this reduction, you should review your withholding to ensure that sufficient funds have been withheld to meet your tax obligation."</p>
<p>
You are correct, unfortunately.</p>