[March 11, 2009]

The American Recovery and Reinvestment Act of 2009 ("Recovery Act"), which was signed into law on February 17, 2009, includes changes in income tax withholding and other items that may affect your paycheck:

Changes in Income Tax Withholding
The legislation authorizes a tax credit of up to $400 for eligible single individuals and $800 for those filing a joint tax return. This tax credit phases out completely at adjusted gross income levels of $190,000 for couples filing jointly and $95,000 for single filers. Non-resident aliens and individuals who can be claimed as tax dependents are not eligible for the tax credit.

The Treasury Department has issued new withholding tax tables to reflect the tax credit. These new withholding tables, which will be used to compute federal income taxes with paychecks dated April 1, 2009 and later, may reduce the amount of income tax withheld from your wages.

You do not have to submit a new Form W-4, Employee's Withholding Allowance Certificate unless you do not want withholding reduced because, for example, you have more than one job or you are married and your combined income places you in a higher income tax bracket. You would need to complete a new Form W-4 and claim fewer withholding allowances on Line 5 or request additional tax amounts withheld on Line 6. You can change your tax withholding online, by signing in to your personal account on At Your Service.

For additional help, get IRS Publication 919, "How Do I Adjust My Tax Withholding?" or visit the IRS website and use the "Withholding Calculator."

Other Changes:

• There was an increase in pretax combined transit and vanpooling benefits from $120 to $230 per month. Contact your payroll representative to make changes to the transportation election.



• Low and moderate income workers may be eligible for the refundable Earned Income Tax Credit ("EITC"). The Recovery Act increases the EITC credit percentage for families with three or more qualifying children for 2009 and 2010. The amount of the EITC is based on, among other factors, the presence and number of qualifying children in the worker's family, as well as on adjusted gross income and earned income. See IRS Publication 596 for more details.

• The information presented in these news archive articles may no longer be current. Please note the date when the article was first published.