The one-year payroll tax reduction would take the place of a two-year extension of the Making Work Pay credit.
Last year, Congress voted in a payroll tax holiday to replace the expiring Making Work Pay Credit.
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The payroll tax holiday was meant to last only one year and take the place of the Making Work Pay Credit.
While Washington seems obsessed with the fate of the Bush tax cuts, it has paid little attention to a soon-to-expire Obama tax cut: the Making Work Pay credit (MWP).
The Making Work Pay Credit, which also applied to earned income, was authorized under the American Recovery and Reinvestment Act of 2009 and was expected to be a temporary cut.
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As Congress is fond of doing, apparently so that they can fight over it every year, that tax provision, like the Making Work Pay Credit, was limited and is set to expire on December 31, 2011.
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According to the Treasury Department's inspector general for tax administration, 15.4 million taxpayers may unexpectedly owe Uncle Sam money for tax year 2009 because in connection with the Making Work Pay Credit, enacted as part of last year's stimulus bill, Congress ordered withholding rates reduced.
For most Americans, this Making Work Pay tax credit began showing up in your paychecks last April.
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Thanks to the Recovery Act, 110 million working families received a tax cut through the Making Work Pay tax credit.
In an effort to get cash to the rest of the country, ARRA offered taxpayers a tax break called the Making Work Pay Tax Credit.
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