U.S. Individual Income Tax Return

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Page 1 of 2 of 2009 Instructions for Schedule M (Form 1040A or11:59 - 23-OCT-2009
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Department of the Treasury
Internal Revenue Service

2009 Instructions for Schedule M (Form 1040A or
1040)
Making Work
Pay and
Government
Retiree Credits
General Instructions
Who Can Take the Credits
Overview. Use Schedule M to figure the
following two credits.
• Making work pay credit.
• Government retiree credit.
Both credits are included in the combined
total on line 14 of Schedule M. Each credit
has different rules. Carefully read the information below about each credit. Even if
you cannot take the making work pay credit
(for example, because your adjusted gross
income is too high), you may be able to
take the government retiree credit.
Making work pay credit. You may be able

to take a credit of up to $400 ($800 if married filing jointly) if you have earned income from work. Even if your federal
income tax withholding was reduced during 2009 because of the credit, you must
complete Schedule M and claim the credit
on your return to benefit from it. You cannot take the credit if the amount you enter
on line 5 is $95,000 ($190,000 if married
filing jointly) or more, you are a nonresident alien, or you can be claimed as a dependent on someone else’s return. The
credit is reduced if either of the following
statements is true.
• You (or your spouse, if filing jointly)
received a $250 economic recovery payment during 2009. You may have received
an economic recovery payment if you received social security benefits, supplemental security income (SSI) benefits, railroad
retirement benefits, or veterans disability
compensation or pension benefits.
• You take the government retiree
credit discussed next.
Government retiree credit. You can take a
credit of $250 ($500 if married filing
jointly and both spouses qualify) if you (or
your spouse, if filing jointly) received a
pension or annuity payment in 2009 for

Use Schedule M to figure the following credits.
• Making work pay credit.
• Government retiree credit.
The credits may give you a refund even if you do not owe tax.

service performed for the U.S. Government
or any U.S. state or local government (or
any agency of one or more of these) and the
service was not covered by social security.
But you cannot take the credit if you and
your spouse both received a $250 economic
recovery payment during 2009. You may
have received an economic recovery payment if you received social security benefits, SSI benefits, railroad retirement
benefits, or veterans disability compensation or pension benefits.

Wages. The amount of your wages is generally the amount reported on line 7 of
Form 1040A or 1040.

Social security number. To take either

Line 1b

credit, you must include your social security number (if filing a joint return, the number of either you or your spouse) on your
return. A social security number does not
include an identification number issued by
the IRS.

Effect of Credits on Welfare
Benefits
Any refund you receive as a result of either
credit will not be used to determine if you
are eligible for the following programs, or
how much you can receive from them. But
if the refund you receive because of either
credit is not spent within a certain period of
time, it may count as an asset (or resource)
and affect your eligibility.

• Temporary Assistance for Needy
Families (TANF).
• Medicaid and SSI.
• Supplemental Nutrition Assistance
Program (food stamps) and low-income
housing.

Specific Instructions
Line 1a
If you are filing Form 1040NR or can be
claimed as someone else’s dependent, skip
lines 1a through 8, enter -0- on line 9, and

M-1
Cat. No. 53119C

go to line 10. You are not eligible for the
making work pay credit, but you may be
eligible for the government retiree credit.

Earned income. If you checked the “No”

box on line 1a, complete the worksheet on
page M-2 and enter on line 1a the amount
you figured using the worksheet.

Enter on line 1b the total nontaxable combat pay you, and your spouse if filing
jointly, received in 2009. This amount
should be shown in Form W-2, box 12,
with code Q.

Line 5
If you are filing Form 2555, 2555-EZ, or
4563, or are excluding income from Puerto
Rico, enter on line 5 the following total instead of the amount on Form 1040, line 38:
1. Form 1040, line 38, plus
2. Any exclusion of income from Puerto
Rico, plus
3. Any amounts from —
a. Form 2555, lines 45 and 50,
b. Form 2555-EZ, line 18, and
c. Form 4563, line 15.

Line 10
An economic recovery payment is a $250
payment sent to you by the U.S. Treasury
during 2009 if you received one of the
types of benefits listed on line 10 during
November 2008, December 2008, or January 2009. If both you and your spouse received those benefits, you each may have
received an economic recovery payment.

Page 2 of 2 of 2009 Instructions for Schedule M (Form 1040A or 1040)11:59 - 23-OCT-2009
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Earned Income Worksheet — Line 1a

Keep for Your Records

Before you begin:
⻫ If you are claiming the additional child tax credit and have already completed Form 8812, enter on line 1a of
Schedule M the amount from line 4a of your Form 8812. Do not complete the worksheet below.
⻫ Disregard community property laws when figuring the amounts to enter on this worksheet.
⻫ If married filing jointly, include your spouse’s amounts with yours when completing this worksheet.

1. a. Enter the amount from line 7 of Form 1040A or Form 1040 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
b. Enter the amount of any nontaxable combat pay received. Also enter this amount on Schedule M, line 1b. This
amount should be shown in Form(s) W-2, box 12, with code Q. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Next, if you are filing Schedule C, C-EZ, F, or SE, or you received a Schedule K-1 (Form 1065 or Form 1065-B),
go to line 2a. Otherwise, skip lines 2a through 2e and go to line 3.
2. a. Enter any statutory employee income reported on line 1 of Schedule C or C-EZ . . . . . . . . . . . . . . . . . . . . . . . . .
b. Enter any net profit or (loss) from Schedule C, line 31; Schedule C-EZ, line 3; Schedule K-1 (Form 1065), box 14,
code A (other than farming); and Schedule K-1 (Form 1065-B), box 9, code J1.* Reduce this amount by any
partnership section 179 expense deduction, any depletion on oil and gas properties, and any unreimbursed nonfarm
partnership expenses deducted on Schedule E. Do not include any statutory employee income or any other amounts
exempt from self-employment tax. Options and commodities dealers must add any gain or subtract any loss (in the
normal course of dealing in or trading section 1256 contracts) from section 1256 contracts or related property . . . .
c. Enter any net farm profit or (loss) from Schedule F, line 36, and from farm partnerships, Schedule
K-1 (Form 1065), box 14, code A.* Reduce this amount by any partnership section 179 expense
deduction, any depletion on oil and gas properties, and any unreimbursed farm partnership
expenses deducted on Schedule E. Do not include any amounts exempt from self-employment tax 2c.
d. If you used the farm optional method to figure net earnings from self-employment, enter the
amount from Schedule SE, Section B, line 15. Otherwise, skip this line and enter on line 2e the
amount from line 2c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2d.
e. If line 2c is a profit, enter the smaller of line 2c or line 2d. If line 2c is a (loss), enter the (loss) from line 2c. . . . .
3. Combine lines 1a, 1b, 2a, 2b, and 2e. If zero or less, stop. Do not complete the rest of this worksheet. Instead, enter -0on line 1a of Schedule M, skip lines 1b through 8, enter -0- on line 9, and go to line 10 of Schedule M . . . . . . . . . . .
4. Enter any amount included on line 1a that is:
a. A scholarship or fellowship grant not reported on Form W-2 . . . . . . . . . . . . . . . . . . . . . . . . . .4a.
b. For work done while an inmate in a penal institution (enter “PRI” and this amount on the dotted
line next to line 7 of Form 1040A or 1040) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4b.
c. A pension or annuity from a nonqualified deferred compensation plan or a nongovernmental
section 457 plan (enter “DFC” and this amount on the dotted line next to line 7 of Form 1040A or
1040). This amount may be shown in box 11 of your Form W-2. If you received such an amount
but box 11 is blank, contact your employer for the amount received as a pension or annuity . . . . .4c.
5. a. Enter any amount included on line 3 that is also included on Form 2555, line
43, or Form 2555-EZ, line 18. Do not include any amount that is also
included on line 4a, 4b, or 4c above . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5a.
b. Enter the amount, if any, from Form 2555, line 44, that is also deducted on
Schedule C, C-EZ, or F, or included on Schedule E in partnership net income
or (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5b.
c. Subtract line 5b from line 5a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5c.
6. Enter the amount from Form 1040, line 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.
7. Add lines 4a through 4c, 5c, and 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8. Subtract line 7 from line 3. Enter the result here and on Schedule M, line 1a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*If you have any Schedule K-1 amounts and you are not required to file Schedule SE, complete the appropriate line(s) of
Schedule SE, Section A. Put your name and social security number on Schedule SE and attach it to your return.

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