Millions must pay back part of tax credit

WASHINGTON – More than 15 million taxpayers might owe the government $250 or more because of how the IRS last spring set up President Obama’s tax break that was designed to help consumers spend the U.S. economy out of recession.

Individuals with more than one job and married couples in which both spouses work might have to repay the government $400, either through a smaller tax refund or a larger tax bill, according to a report released Monday by the Treasury Department’s inspector general for tax administration. Social Security recipients who also earn taxable wages might have to repay $250.

The tax credit, which is supposed to pay individuals up to $400 and couples up to $800, was Obama’s signature tax break in the massive stimulus package enacted in February. The credit has increased weekly paychecks for 95 percent of working families, giving them cash to help boost consumer spending during the worst economic recession in decades.

Workers concerned about whether they are withholding enough taxes can use a calculator on the IRS Web site to find the appropriate amount that should be withheld.