Some working taxpayers who received the Economic Recovery Payment and are also eligible for the Making Work Pay tax credit are slowing down their tax refunds by not properly reporting the $250 payment on their tax returns.
Anyone who received the one-time Economic Recovery Payment must reduce the Making Work Pay credit they claim by the amount of the one-time payment. If you received a one-time payment, but do not report it on your return, it will slow your refund.
Most eligible taxpayers received this payment in 2009 and reported it on the 2009 return, usually filed in 2010. Some people didn’t receive their payment until 2010 and must show it on their 2010 return, usually filed in 2011.
The Making Work Pay tax credit is based on earned income and is claimed on your return using Schedule M, Making Work Pay Credit.
A one-time payment of $250 was made to:
- Retirees, disabled individuals and Supplemental Security Income (SSI) recipients receiving benefits from the Social Security Administration
- Disabled veterans receiving benefits from the U.S. Department of Veterans Affairs
- Railroad Retirement beneficiaries
These payments were made by the Social Security Administration, the Railroad Retirement Board and the Department of Veteran's Affairs, not the IRS. You can find information about the economic recovery payments on their web sites.
The Economic Recovery Payment is a reduction to any Making Work Pay tax credit for which you may qualify. For more information regarding the economic recovery payment and the Making Work Pay credit, see these questions and answers.
You can call the benefit agencies and speak to a representative about the economic recovery payment at the following toll-free numbers:
- Social Security Administration: 1-800-772-1213.
- Department of Veterans Affairs (VA): 1-800-827-1000.
- Railroad Retirement Board: 1-877-772-5772
You can also call IRS at toll-free at 1-866-234-2942 or use the Did I Receive a 2010 Economic Recovery Payment? online tool on IRS.gov.
- 2010 Instructions for Schedule M (1040A or 1040)
- FS-2011-03, Most Workers Need to File Schedule M; Making Work Pay Credit Offers Tax Savings Up to $800
- Tax Tip 2011-15, Five Important Facts about the Making Work Pay Credit