'Making Work Pay': an Easy $400 Tax Credit -- if You Fill In the Right Form

As April 15 approaches, MoneyWatch is publishing daily tax tips. See the full list here, and please check back frequently for the latest advice from our experts.
Here's your chance to quickly score $400 or, more likely, to hang on to $400 you may not have realized you already received. All you have to do is remember to claim the "Making Work Pay" credit, an element of the federal stimulus package made available last year to most taxpayers, even those who didn't buy a home or a car or happen to be a failing bank.

The credit provides $400 to anyone whose adjusted gross income was between $6,451 and $75,000 last year and smaller amounts for those earning up to $6,451 and between $75,000 and $95,000. All figures are doubled for married couples filing jointly.

Retirees, even those with no other income, are generally eligible for $250.

Chances are you have already pocketed your money, as employers were encouraged to reduce amounts withheld from wages. But to keep it, or to extract it from the Internal Revenue Service if there was no withholding reduction, you or your tax preparer have to fill in Schedule M of Form 1040 (the tax code may be simplified once all the letters of the alphabet have been exhausted, but don't bet on it).

At least Schedule M itself is fairly straightforward. It's a single page. As with so many I.R.S. forms, several of the lines apply only to one taxpayer in a gazillion, but the instructions helpfully steer the remaining multitude of taxpayers past lines that don't affect them.

After you've filled out the form, try not to forget to do it again next year. The credit is promised on 2010 income too.

More tax tips:

• Estate Tax Gets a Year Off, but the IRS Will Still Reap Grimly
• Tax Tips for Job Hunters: What You Can and Can't Deduct
• CPA vs. Software: Best Way to Save on Taxes