Got my $400 'Making Work Pay' tax credit. Nice one!

It was DD'd to my US savings account a few days ago. Should come in handy for when I next visit the US.

What is this tax credit? How do you get it?

Just look at the 2009 1040 Instructions, specifically the Instructions for Schedule M.  The credit is $400 or $800 if married filing jointly.  To be eligible you have to have earned income from work.  But, read the instructions because there are the usual ifs and buts (for instance there is an income limit.)

I was amazed to find out about this, I had never heard of it.  I happened to be sitting at home actually filling out the 1040 a month or so ago, when my daughter called to tell me she had just completed her 1040.  She mentioned this credit.  I would never had looked at that Schedule M if she hadn't mentioned it.

Is this the credit that most have been receiving in the form of lower taxes last year? (ie. a little at a time?) I was doing my taxes online the other night and came to this question. I wasn't sure what to answer. I'm still in the US by the way.

Is this the credit that most have been receiving in the form of lower taxes last year? (ie. a little at a time?) I was doing my taxes online the other night and came to this question. I wasn't sure what to answer. I'm still in the US by the way.

Yes, but you will still have to fill out the Schedule M and claim the amount of the credit in line 63 of the 1040.  Otherwise I assume that you would have to pay back the amount that you have gained by lower withholding?

Don't forget that this is taxable income in the UK if domiciled in the UK or paying UK tax on the arising basis.

This is the first I've heard of this as I'm in the UK and won't be looking at my US tax return until next month. I only have UK income and file 1116 Foreign Tax Credit which basically brings my US tax liability to zero. Am I entitled to claim the Making Work Pay credit?

I'm no tax expert, but you might qualify, depending on how much income you earned.  Basically, you take your AGI and put it into form M and the math there reduces your amount if you're over a certain income (I think).  

For those of us that that use 2555 or 2555-EZ, there are special instructions on Schedule M to include our excluded wages (since this is for the work we did abroad, thus making work pay!). I think, if you earned less than $75000, you get something, although I could be wrong.  Basically though, we're not excluded just because we lived and worked abroad.  However, you may find that once you do the math on Schedule M, you've made too much to qualify.

I must say, this is the only upside of having to file taxes whilst living abroad.  I hadn't thought about this until I saw the OP.  Good thing, I have had my tax return in my bookbag for a week, just waiting to get to the post office.  Now I've redone them, and will get the full $400!