TAX RATES AND TAX CRED­ITS

Wicklow People (Arklow) - - NEWS - with Der­mot Byrne

A SIN­GLE per­son can earn €33,800 at the 20 per cent rate band and then pass into the 40 per cent rate. The fig­ures for a mar­ried cou­ple with one in­come are €42,800 at 20 per cent and then 40 per cent. If both are earn­ing, then they can earn €67,600 at 20 per cent and the bal­ance is taxed at 40 per cent. A widow or wid­ower with chil­dren has a 20 per cent rate band of €37,800 and bal­ance is taxed at 40 per cent.

A sin­gle per­son tax credit is €1,650 as is the PAYE tax credit. It fol­lows that most sin­gle peo­ple should have an­nual tax cred­its of €3,300 when the two cred­its are added to­gether. If you do not have them then there is some­thing wrong and you should call the tax of­fice.

A mar­ried per­son is en­ti­tled to a tax credit of €3,300. If both spouses work then the to­tal tax credit is still €3,300. If both are on PAYE they each get the PAYE credit of €1,650. There­fore if both are on PAYE, then their to­tal cred­its nor­mally should be €6,600.

A wid­owed per­son with chil­dren is en­ti­tled to a tax credit of €3,600 in the year af­ter the spouse’s death. The tax credit falls over the fol­low­ing four years to €1,800 for the fifth year af­ter the be­reave­ment.

Per­sons aged over 65 are en­ti­tled to an Age Credit of €245 and where mar­ried the credit is a to­tal of €490.

A sin­gle per­son with de­pen­dent chil­dren gets an ad­di­tional tax credit of €1,650. Only one of the par­ents can qual­ify for it.

A self-em­ployed per­son gets a new Earned In­come Credit of €950 in 2017. If the per­son al­ready has the PAYE tax credit due to em­ploy- ment then they can­not also get the new Earned In­come credit. One can claim which­ever is best in the cir­cum­stances.

If one spouse stays at home to look af­ter chil­dren, they can qual­ify for the Home Carer credit of €1,100 in 2017.

Where an el­derly rel­a­tive lives with the fam­ily, whose in­come is rel­a­tively low, then the De­pen­dent Rel­a­tive Credit of €70 can be claimed. It should be either abol­ished or in­creased to a re­al­is­tic level.

Apart from the per­sonal tax cred­its, the most widely claimed cred­its are for Health Ex­penses. Nurs­ing home main­te­nance is al­lowed as a credit against tax paid at 40 per cent while other health ex­penses are al­lowed only at the 20 per cent rate. There is a fouryear claim pe­riod and if you miss that, then your claim is lost.

A tax credit is avail­able for col­lege fees paid, with the first €3,000 ig­nored for a full­time course and the first €1,500 ig­nored for a part­time course. The ig­nored amounts re­fer to a fam­ily claim so that, if there are sev­eral fam­ily mem­bers at col­lege, the ig­nored amounts are still €3,000 or €1,500 per an­num.

The Home Ren­o­va­tion In­cen­tive Scheme gives a tax credit equal to the amount of VAT suf­fered on re­pairs or im­prove­ments in one’s pri­vate house. The tax credit is given over two years, half in the year af­ter the work is done and half in the next year. The max­i­mum credit is €4,050 be­tween the two years. One should en­sure the con­trac­tor is reg­is­tered for the scheme be­fore com­menc­ing the work.

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