Tax Aid in Recovery Package Would Reach Large Numbers of Workers in Every State

Tax credits in the economic recovery package provide tax relief to most workers. The centerpiece of the tax relief is a new Making Work Pay Credit of up to $400 per worker. The credit phases in at the same rate as Social Security taxes and is available to all workers (except those claimed as another taxpayer's dependent) earning up to $95,000 and married couples earning up to $190,000. In 2009, the credit would be reduced by the amount (if any) of the family's Economic Recovery Payment, a one-time payment of $250 for recipients of Social Security, SSI, and certain other benefits.

Some families helped by the Making Work Pay Credit — those with children and low or moderate incomes — will receive additional help through expansions in the Earned Income Tax Credit and Child Tax Credit.

The following table shows estimates, by state, of the number of taxpayers eligible to receive the Making Work Pay Credit: 110.7 million taxpayers nationwide, according to figures from the Tax Policy Center. The state numbers are calculated by assigning each state its share of the 110.7 million total based on its share of wage-earning tax filers in 2006 according to IRS data.^[1]

The table shows that, in every state and the District of Columbia, large numbers of tax filers will benefit from the provision. Substantial numbers will benefit even in small states like Wyoming (206,000), Alaska (274,000), and North Dakota (256,000). In the largest states, the numbers range up to 12.4 million in California, 8.0 million in Texas, 6.8 million in New York, and 6.7 million in Florida.