The House signed off on the compromise measure this afternoon. The Senate could possibly vote on the bill tonight.
As soon as details about what was in the bill, and especially the Making Work Pay credit, started coming out, people started asking questions. Now that the new tax break is imminent, the queries are coming fast and furious.
"I already filed my taxes for this year. Do I need to refile now to get this money?" asks Jessica.
"Will this 'working' money be sent out to us like last year's stimulus rebate?" writes Joe.
Jessica and Joe, the answer in both cases is "no."
New credit, old payout method: In its final form, the new tax break will entitle workers making $75,000 individually or $150,000 as a family to $400 per person or $800 per family.
If you make more than those earning limits, the credit amount starts phasing out. It disappears completely if your income is more than $95,000 as a single taxpayer and $190,000 if you are married and file jointly.
This time, though, whatever amount you get will not be sent out as a separate check, as was done with last year's stimulus rebates. Rather, the distribution plan for the Making Work Pay credit has always been that it be parceled out in your paychecks; hence the name.
What happens next is as soon as H.R. 1 is law, the IRS will issue new withholding tables for use by employers and/or the payroll companies to which they outsource. The IRS has known this was coming, so they've had a head start.
Those new amounts then will be plugged into the payroll systems and you'll have a smaller amount of taxes taken out of your pay via withholding to reflect the $400 per person credit.
If all goes according to plan, the ultimate amount that you'll get back this year, a few dollars a time each payday, will add up to the $400 per person credit amount, as long as you are under the income threshold.
So all workers have to do is wait for Congress and then the IRS and payroll administrators to do their jobs.
More info on its way: I'm working right now (well, right now I'm typing this, but you know what I mean) on a stimulus story for Bankrate.
As I examine the measure and have time between my Bankrate job and sleep, I'll share how the tax provisions of H.R. 1 might affect you, your bank account and your future tax filing and planning. So please stay tuned!