Lock In Your Payroll Tax Cut

If you don’t claim the Making Work Pay Credit on your tax return, you lose it.

You probably received the benefit of the Making Work Pay Credit in the form of reduced payroll tax withholding and slightly bigger paychecks last year. But you don’t get to keep the credit -- which reduces your tax liability -- unless you claim it on your 2010 tax return.

And if your income or filing status makes you ineligible for the credit, you’ll have to give it back. That could mean getting a smaller tax refund or owing more tax when you file your 2010 return, which is due by April 18, 2011.

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Mary Beth Franklin
Former Senior Editor, Kiplinger's Personal Finance