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Feds start withholding a little less from paychecks

Feds start withholding a little less from paychecks

American workers will see between $8 and $12 more in their next paychecks thanks to a federal middle

American workers will see between $8 and $12 more in their next paychecks thanks to a federal middle-class tax break that takes effect today.

The Making Work Pay provision of the American Recovery and Reinvestment Act will change the way the federal government withholds taxes for this year and next, giving a maximum credit of $400 for individuals and $800 for married couples filing jointly. That credit will be reflected in the workers' take home pay in the form of reduced withholding for federal taxes.

The credit is phased out for individuals who make more than $95,000, and couples that make more than $190,000.

To be eligible, a person must be employed and paying into Social Security.

"This simple change in the tax code is going to quickly put more money in the pockets of 95 percent of Americans as they struggle to make ends meet in this very difficult economy," Rep. Paul Tonko, D-Amsterdam, said in a statement.

Some local workers have already seen an increase in their paychecks, including Eileen Vargas, a receptionist at New York Central Mutual Insurance Corporation in Amsterdam. Vargas said she saw $19 extra dollars in her last paycheck, which she gets every two weeks.

Vargas said she will probably use the money for everyday things such as groceries.

"It's good to have a little extra money," she said.

Lynda Bradt, controller and office manager for Eastern Medical Support, said the company uses Quickbooks, which automatically updated the company's withholding.

Bradt suggested people save that money for a vacation or Christmas fund, which she herself intends to do.

"Ten dollars a week doesn't seem like a lot, but it can add up," she said.

The Making Work Pay tax credit is just one of the tax incentives President Barack Obama plans to implement to help middle class workers. He also intends to create a universal mortgage credit and make it easier for people to file their taxes.

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