TAX CREDITS CHECK
Now is a good time to check if you have got all the tax credits you were entitled to since 2014. Tax credits reduce the amount of tax you pay so be sure to claim all the ones you’re entitled to.
“People often forget that the home carer credit is available — or they may not realise they’re entitled to it,” said Collender. “You don’t need to be living with the person you’re looking after to be able to claim the credit.”
The home carer tax credit, which is currently worth €1,200 a year, can be claimed by married couples or civil partners who care for one or more dependent people. (It cannot be claimed if the dependent person is your spouse or civil partner.)
Married couples and civil partners however should do their maths here — particularly if both spouses are earning. “It may work out better taxwise to forgo the home carer’s tax credit,” said Collender. “You cannot claim both the home carer tax credit and the increased tax rate band. You should claim whichever is more beneficial for the family.” (The increased tax rate band allows married couples who are both working to pay the standard rate of income tax on up to €70,600 of income, rather than on up to €44,300 of income if only one spouse is working).
You may be due a tax refund if you did not receive the right tax credits in a given year — or if more of your income was taxed at the higher rate of income tax than should have been the case.
Always check your tax credits and tax bands (the bands which determine how much of your income is taxed at 20pc — and how much is taxed at 40pc) if there has been a change in your personal circumstances in recent years.
“If you get a special social welfare payments in a given year, check back over your payslips and do a calculation at the end of that year to see if you were properly taxed or if you are due a refund,” said Collender. “For example, if you go on maternity leave, there is an adjustment made to your tax credits and bands — it can happen that the adjustments made may not be correct.”
Married couples, who are jointly assessed for tax, should check how the tax credits and rate bands are split between them — particularly if one spouse is self-employed and the other spouse is a PAYE worker. “One spouse might be getting the full €44,300 of his or her income taxed at the 20pc rate — or the tax credits might not be divided equally among both spouses,” said Collender. “This means one spouse might be carrying more of the tax burden for the couple than they should. The person taxed through the PAYE system should have a look at their tax credits and rate band and see how they’ve been allocated.”