Photo by Leonid Mamchenkov. Used under Creative Commons license.

There is a new tax credit, the “Making Work Pay Credit,” which is part of the American Reinvestment and Recovery Act. The good news is, it returns $400 to $800 to taxpayers, and employers are already automatically crediting workers in their paychecks.

The bad news is, certain people – especially those who have more than one job, or who are married and file a joint return — could end up owing taxes if they don’t adjust their withholding levels soon, according to Kelly Batson, a director of United Way’s Earn It! Keep It! Save It! free tax assistance program.

“For example, someone who has three jobs and is entitled to a $400 Making Work Pay Credit could be credited $400 by all three of his employers,” warned Batson. “Come April, he would owe $800.”

The credit may also pose problems for married couples who file joint returns, she warned.  For instance, the couple may be entitled to an $800 tax credit, but if both of their employers are  already crediting the full $800, they will receive $1,600 in credits, and will owe $800 in April.

“Fortunately, with three months remaining in 2009, there is still time for taxpayers to adjust withholding amounts with their employers,” Batson said.  ”The IRS has created an online “Withholding Calculator” to help people sort it all out.”

You can learn more by reading outreach materials from the IRS and FAQs on the credit and the withholding info.