Tax Relief for TN Working Families Starts Today

April 1, 2009, WASHINGTON, D.C. – As part of the effort to reverse the economic downturn, starting today, April 1st, a new tax credit goes into effect that will allow more than 2 million Tennessee families to keep more of the money they earn. 

“When we passed the Economic Recovery package in February,” explained Congressman Bart Gordon, “we designed it to provide regular tax relief to individuals and families with the idea that they would, in turn, use the extra money to stimulate the economy.”

The Making Work Pay (MWP) tax credit, a measure included in the American Recovery and Reinvestment Act, which was signed into law on February 17, 2009, will provide 95% of working families with immediate tax relief.  Rather than receiving a single tax rebate check, working Americans will see more money in each of their paychecks.

“Families should see at least a $65 dollar-per-month increase in their take-home pay starting this month,” said Gordon.  “At first glance, this may not sound like much money, but over the course of the next two years, it could amount to an additional $800 for individuals and $1,600 for families.”

Aimed at low- and middle-class Americans, the MWP tax cut provides a refundable tax credit of 6.2 percent on earned income up to $400 for individuals and $800 for families during 2009 and 2010.

“The goal of the Recovery bill was not only to create jobs and help states deal with looming budget deficits,” added Gordon, “but also provide immediate tax relief to working Americans.  An estimated 110 million working families will benefit from this tax credit.”

If you have any questions regarding the Making Work Pay tax credit, you can contact the Internal Revenue Service’s toll-free hotline at 1-800-829-1040.