New Mexicans could begin to a little more pay from work beginning this week because of the Making Work Pay tax credit.

Part of the American Recovery and Reinvestment Act, the tax cut will provide a refundable tax credit up to $400 for working individuals and $800 for married taxpayers filing joint returns. The New Mexico House delegation applauded the Making Work Pay tax credit.

“Families throughout New Mexico will start to see the Making Work Pay tax credit in their paycheck beginning this week,” said Rep. Ben Ray Luján (D-NM), who represents Rio Rancho and the Third Congressional District. “During these difficult economic times, it is important that we look out for working families. Over 95 percent of families will see the benefits of the Making Work Pay tax credit, helping them make ends meet during this economic downturn.” According to the Internal Revenue Service, workers don’t have to take action to receive the credit. For most workers, the credit will typically be handled by their employers through automated withholding changes. These changes may result in an increase in take-home pay. Taxpayers who don’t have taxes withheld by an employer can also claim the credit on their 2009 tax return.

The Making Work Pay tax credit is part of larger tax relief headed to New Mexico. According to the IRS, several tax provisions in the American Recovery and Reinvestment Act are available for families and small businesses:

• Money back for new vehicle purchases. Taxpayers who buy certain vehicles in 2009 can deduct state and local sales taxes.

• Increased transportation subsidy. Employer-provided benefits for transit and parking are up in 2009.

• Up to $2,400 in unemployment benefits tax free in 2009. Individuals should check their tax withholding.

• Net operating loss carry back. Small businesses can offset losses by getting refunds on taxes paid up to five years ago. Information on the carry back, an expanded section 179 deduction and other business-related provisions is now available.

• COBRA: health insurance continuation subsidy. The IRS has extensive guidance for employers, including an updated Form 941, as well as information for qualifying individuals.

• First-time homebuyer credit expands. Homebuyers who purchase in 2009 can get a credit of up to $8,000 with no payback requirement.

• Enchanced credits for tax years 2009, 2010. Details available on the earned income tax credit, additional child tax credit and American Opportunity Credit, a new higher education benefit.

• $250 for social security recipients, Veterans and Railroad Retirees. The Economic Recovery Payment will be paid by the Social Security Administration, Department of Veterans Affairs and the Railroad Retirement Board.