TAX NEWS - January 2010
IRS Tax Tip 2010-20: Seven Things You Need to Know About the Government Retiree Credit
Here are seven things the IRS wants you to know about the Government Retiree Credit:
1. You can take this credit if you receive a pension or annuity payment in 2009 for service performed for the U.S. Government or any U.S. state or local government and the service was not covered by social security.
2. Recipients of the Making Work Pay Credit will have that credit reduced by any Government Retiree Credit they receive.
3. The credit is $250 for individuals and $500 if married filing jointly and both you and your spouse receive a qualifying pension or annuity.
4. You must have a valid social security number to claim the credit. If married filing jointly, both spouses must have a valid social security number to each claim the $250 credit.
5. You cannot take the credit if you received a $250 economic recovery payment in 2009.
6. This is a refundable credit, which means it may give you a refund even if you had no tax withheld from your pension.
7. To claim the credit, you must complete Schedule M, Making Work Pay and Government Retiree Credits, and attach it to your Form 1040A or 1040.