The American Recovery and Reinvestment Act, which President Barack Obama signed in February, included a Making Work Pay Credit (MWPC), which led to revisions in the federal income tax withholding tables.
As cited by the IRS, new rates will begin for bi-weekly payroll April 3 and monthly payroll April 30.
While the new rates are intended to provide tax credits of $400 and $800 for single taxpayers and married couples, respectively, the plan could create potential problems, according to Franki Senter, payroll director for the University.
She said students and people holding multiple jobs are liable to be under-withheld at the end of the year.
Senter said she is worried many students have a lack of knowledge on the newly passed plan that can be potentially harmful to them. She said students need to be informed so they can access their own financial situation and not be shorthanded.
“We want to inform people that these new tax tables could cause problems for some people,” Senter said. “We’ve asked our payroll coordinators and personnel representatives to spread the word for us.”
Paul Florence, a junior in political science and employee of the School of Public and International Affairs Office, said he thinks the new plan is unfair.
“The fact that they’re lowering taxes is a good idea, but the fact that singles get less money back than married couples doesn’t seem fair,” Florence said.
According to the new tables, if both spouses earn wages and both file as “married” on their tax withholding, each will receive an additional $600 by the end of the year.
However, for students who have more than one job, they could see tax withholding reductions of up to $400, at each job. In addition, they will only be entitled to a credit, if single, of $400 or less.
Florence said the stimulus plan is going to be shorting Americans in the long-run.
“It seems that this stimulus plan is going to make the American people happy in the short run, but how much good is another extra $800 going to do you and what is it actually going to fix in our wrecked economy?” Paul asked.
Chelsea Schwabe, a freshman in communication, shared Florence’s concerns.
“Because I’m considered a dependent, I guess not receiving as much as everyone else is irritating,” she said. “In the long run I don’t think it’s really going to help.”
Schwabe’s biggest concern, however, is students lack of knowledge on the newly passed plan.
However, Brad Lacroix, a senior in history who works at a convenience store on campus said the new withholding tables are necessary.
“They [ government ] need to get the economy going and the economy mainly relies on families,” Lacroix said.
Senter said regardless, students need to start researching this new plan and applying it to their own financial situations.
“Take a look at your own situation and be informed,” Senter said.
