Will I be receiving a stimulus payment like last year?

Unlike last year, the check is not automatically in the mail for most taxpayers. For approximately 95% of America's working families, their refundable tax credit of up to $400 for working individuals and up to $800 for working couples will be paid through reduction of income tax withholdings (in other words, an increased paycheck). The reduced withholding is scheduled to start no later than April 1 of this year. Note: Certain retirees and veterans will be receiving a $250 check sometime this year, however.
updated: 23 Feb 2009

What determines if I qualify for the full benefit?

The tax credit is calculated at a rate of 6.2% of your earned income (or joint income if filing MFJ - Married Filing Jointly). If you earn at least $6,450 and are not phased out of the credit, you will receive $400.

Eligibility for the 'Making Work Pay' credit starts to phase out for individuals with adjusted gross incomes over $75,000 and phases out completely at $95,000. For couples, the phaseout starts $150,000 and completely phases out at $190,000.
updated: 23 Feb 2009

How do I receive my 'Making Work Pay' credit?

Employees will benefit from the new credit now through reduced federal income tax withholding. The reduced withholding is scheduled to start no later than April 1 this year. Self-employed individuals can change their estimated tax payments, but care should be
taken when doing so because self-employment income fluctuates, and a quarterly underpayment could occur even if you have a refund at the end of the year.
updated: 23 Feb 2009

If I want to start receiving the 'Making Work Pay' credit now, what do I need to do?

That would be a personal decision that you or you and your family would need to make.
The amount that your withholding will be reduced depends on your earnings level and the number of pay periods remaining in the year when the reduced withholding starts.
updated: 23 Feb 2009

What if I elect to adjust my withholding, but at the end of the year I am not eligible for the full $400 credit - will I have to pay it back?

Because reduced withholding could result in a balance due on your tax return, it appears that you would, in effect, be required to pay back any excess benefit that you received during the year. The Tax Institute at H&R Block is awaiting clarity regarding whether an excess advance payment would have to be repaid and any underpayment penalty that results because of this change. More details will be forthcoming.
updated: 23 Feb 2009

What if I'm self-employed and pay estimated taxes?

Eligible taxpayers who are self-employed can adjust their quarterly estimated tax payments to account for the 'Making Work Pay' credit. Care should be taken before doing so because self-employment income fluctuates, and a quarterly underpayment could occur even if you have a refund at the end of the year.
updated: 23 Feb 2009
The unemployed -

I've heard that I will no longer have to pay tax on my unemployment benefits -

Not quite, but there is some good news for jobless workers in the 2009 stimulus bill.
updated: 23 Feb 2009

Is it also true that unemployment benefits have also been extended?