Below are some of the tax law changes that are in effect for 2009. Some may be prior tax laws that have been extended.

Tax laws change daily, therefore this information is proved as a reference and is not intended to be a direct quotation of the tax laws.

The refundable credit is equal to 6.2 percent of a taxpayer’s earned income with a maximum credit of $800 for a married couple filing a joint return and $400 for other taxpayers, but it is phased out for higher income taxpayers. The phase-out applies for those with adjusted gross income above $75,000 for individuals and $150,000 for married couples filing jointly. The credit is available for 2009 and 2010, but may be extended under President Obama’s budget proposals (See the article on the Obama budget below.) Ineligible individuals include nonresident aliens, those claimed as a dependent on another person’s tax return and those who do not include a social security number on their tax return. For joint filers, only one social security number is required on the return.

The credit is being implemented through revised income tax withholding tables which employers were required to start using by April 1 of this year. Employers and payroll companies will handle this change, so taxpayers do not need to fill out new W-4 withholding forms to have the credit amount reflected in their take-home pay.

Two Important Points: Taxpayers will not get a separate check mailed to them from the IRS like last year’s economic stimulus payment. Also, with the adjusted withholding tables, employees need to ensure that enough taxes are withheld, as the credit could reduce the withholding for a married couple with dual income by too much if the couple is ineligible or only partially eligible for the credit.