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Good news: I didn't know about the "making work pay" credit and my refund is $800 more than I had anticipated.

Bad news: I don't understand it. I have read the IRS web pages on this credit and they say that our employers should have been withholding according to the new rules. So why do we get the credit with our tax refund (we withhold so that we usually only have to pay or be refunded a couple hundred dollars, at most)? I did notice a change in the pay amounts early in 2009, so our employers seem to have used the new schedules.

It sounds like we had less withheld during the year, but also get another $800 credit at tax time?

Am I understanding this correctly?

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