Who is Eligible?

• If you worked at all, even as a self-employed individual, you will receive this credit and your employer will reduce your federal tax withholding each paycheck, according to the Internal Revenue Service. The credit phases out for people earning more than $75,000, but less than $95,000. People making more than $95,000 do not receive anything. For this particular credit, you must include any foreign earned income or income from a U.S. territory. Also, you cannot be claimed as a dependent on another person's return.
  
  

How Much is It Worth?

• The maximum a single person can receive for the Making Work Pay credit is $400, or $800 for married couples. Unlike the Earned Income Tax Credit, having dependents does not change its value. The actual credit you receive equals 6.2 percent of your earned income. In 2009, however, the IRS reduced the amount of the MWP credit by $250 from economic stimulus payments to people receiving government benefits. Some people received tax penalties for underpaying their quarterly estimated tax payment due to economic stimulus checks.
  
  

How Can I Claim This Credit?

• Although employers automatically add this credit to your paycheck, you must fill out a Schedule M or you will have to pay back your adjusted withholding tax. After calculating the value of your credit, you must report it on line 63 of your 1040. Taxpayers using a 1040EZ have schedule M on the back of their return and report it on line 9. The self-employed will have to reduce their quarterly tax payments by their estimate of the MWP credit.
  
  

Anything Else I Should Know?

• If you have multiple jobs, you may have to adjust your withholding tax. IRS publication 919 contains a special worksheet to determine if you still qualify for the MWP credit. You may have to submit a new W-4. Take this credit even if you have no tax obligation, because it is refundable to you. As a credit, this lowers your bill by the allowable amount of your credit.