Obama's 'Working Class' Tax Credit Kicks in This Week

An estimated 1.4 million working families in Oregon are expected to benefit from the "Making Work Pay" tax credit signed into law by President Obama in February, putting some $700 million into the state's economy over the course of the next year. 

Federal officials describe it as one of the fastest and broadest tax cuts in American history.

This week, the Obama Administration released a state-by-state analysis to show the impact the tax credit is having across the country.

In Oregon that means 1.4 million working families, an estimated 95 percent of the total, will collectively get $700 million dollars in hand to help them weather the current economic storm, reflecting "the administration's strong and sustained commitment to the middle class," according to a press statement.

Nationally, the credit provides over 110 million working families tax relief worth about $60 billion. 

Democrats said that the Republican alternative budget, announced Wednesday, would roll back the tax credits to 2010, thereby increasing taxes for the same 95 percent of working families.

Officials said the IRS has asked that employers institute the lower withholdings for their employees by April 1.

The Obama Administration says the tax credit will support working class families three ways:

•For 2009 and 2010, the "Making Work Pay" tax credit provides a refundable tax credit of 6.2 percent of earned income up to $400 for working individuals and $800 for married taxpayers. 

• Families should see at least a $65 dollar per month increase in their take home pay.

•The credit will phase out for taxpayers with adjusted gross income in excess of $150,000 for married couples filing jointly and $75,000 for other workers, and thus is fully phased out for taxpayers with modified adjusted gross income in excess of $190,000 for married workers and $95,000 for other workers.