Millions of American taxpayers, mostly senior citizens, will owe taxes on the middle-class “tax break” passed by Congress and signed into law by President Obama.
You see, the “Making Work Pay” tax credit was never structured properly. So the $250 rebate from the federal government will lead to millions owing taxes next April 15th.
More than 15 million taxpayers could unexpectedly owe taxes when they file their federal returns next spring because the government was too generous with their new Making Work Pay tax credit…
Most workers started receiving the credit through small increases in their paychecks in April. The tax credit was made available through new withholding tables issued by the Internal Revenue Service.
The withholding tables, however do not take into account taxpayers with multiple jobs or married couples in which both people work. They also don’t take into account Social Security recipients with jobs that provided taxable income.
The Social Security Administration sent out $250 payments to more than 50 million retirees in the spring as part of the economic stimulus package. The payments were meant to provide a boost for people who didn’t’ qualify for the tax credit.
However, they went to many retirees who also received the credit. Those retirees will have the $250 payment deducted from their tax credit—— but not until they file their tax returns next year, long after the money may have been spent.
So millions of Americans, again mostly senior citizens, will end up with a tax liability they didn’t ask for. It’s more out-of-pocket expenses in the middle of a deep, prolonged recession. All thanks to the federal government.
Once again Uncle Sam interferes with people’s lives and leaves them worse off. When will the morons in Washington learn their lesson?


by Stephan Tawney on November 16, 2009