As a part of the American Recovery and Reinvestment Act, the Making Work Pay tax credit provides a credit of up to $400 per worker against their 2009 and 2010 taxes. To get this tax credit money into the hands of taxpayer now rather than later, legislators instructed the IRS to revise the withholding rates so workers can see a boost in their take-home pay now.

The IRS has already released the new withholding rates, and asked employers to implement them no later than April 1.  Payroll Network implemented the new withholding rates effective February 24.

For more information about this tax credit, please see this IRS article: http://www.irs.gov/newsroom/article/0,,id=204447,00.html