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Making Work Pay Credit: IRS Will Waive the Penalty for Underwithholding1 min read
In the spring, the IRS issued revised withholding tables to allow taxpayers to take advantage of the Making Work Pay Credit. The Making Work Pay Credit is the lesser of: 6.2% of an individual’s earned income or $400 ($800 for a joint return). It is phased out for higher income taxpayers. The revised withholding tables have caused many taxpayers to be underwithheld.
The instructions to the 2009 version of Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts, state that the IRS will waive the penalty for adjustments to the income tax withholding tables that took effect in the spring of 2009. To request a waiver, a taxpayer must check box A (for a waiver of the entire penalty) or box B (for a waiver of part of the penalty) in Part II of Form 2210.
By Simons Bitzer
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