tuition fees against tax

monkey8

I have a quick question that i would appreciate if someone could help me out.
I am working full time and I want to do an MBA which costs €9,000 a year.
had a quick look at the revenue page http://www.revenue.ie/en/tax/it/reliefs/tuition-fees.html
which says you can claim for up to €7,000.

Now, I always leave all my tax affairs to my accountant so forgive me if this seems like a stupid question but does that mean that i can claim the full 7,000 back on tax and i would only effectively be paying 2,000 a year or is it only a small percentage i claim back on €7,000???

Thanks in advance for your help

relax carry on

monkey8 wrote: »

I have a quick question that i would appreciate if someone could help me out.
I am working full time and I want to do an MBA which costs €9,000 a year.
had a quick look at the revenue page http://www.revenue.ie/en/tax/it/reliefs/tuition-fees.html
which says you can claim for up to €7,000.

Now, I always leave all my tax affairs to my accountant so forgive me if this seems like a stupid question but does that mean that i can claim the full 7,000 back on tax and i would only effectively be paying 2,000 a year or is it only a small percentage i claim back on €7,000???

Thanks in advance for your help

As its a tax relief granted at the standard rate, it is 20% of the allowable figure.

shuyin1

College fees Full time - first 2k disallowed Part time - first 1k disallowed Maximum is 5000, and as above its a 20% credit.

gerrybbadd

monkey8 wrote: »

I have a quick question that i would appreciate if someone could help me out.
I am working full time and I want to do an MBA which costs €9,000 a year.
had a quick look at the revenue page http://www.revenue.ie/en/tax/it/reliefs/tuition-fees.html
which says you can claim for up to €7,000.

Now, I always leave all my tax affairs to my accountant so forgive me if this seems like a stupid question but does that mean that i can claim the full 7,000 back on tax and i would only effectively be paying 2,000 a year or is it only a small percentage i claim back on €7,000???

Thanks in advance for your help

The way it works is, the first 1000 doesn't qualify for relief if your course is part time, or 2000 of its full time.

Relief is granted on upto €7000.00, not €5000 as stated above. The qualifying amounts were amended last year.

You get relief at 20%

monkey8

thanks a mil for your helpful replys guys

pc11

If fees are higher than that, I've read about using 2 people to claim the full tax relief.

Eg if the fees are 15,000 you get half receipted to person 1 and half to person 2. As I understand it, anyone can pay the fees on behalf of anyone else and claim the tax relief.

My questions are:

1. is this correct?
2. Has anyone done it?
3. If you borrow the fees and they are paid direct to the college (as is done with GEM loans for instance) can you still get it receipted to 2 people? Would it matter if neither were the actual student?

What I'm getting at is that the tax relief is not much use if you're in a 4 year course and not actually earning, so I'm trying to get the relief via a partner or relative.

Pass the Sauce love

I may be mistaken, but if the second person is claiming half the expenses then I think Revenue can include their portion of expenses as income for you, and such, you be taxed on this income. I may be wrong, but I'm sure I read something similiar before on a medical expense issue, where two people claimed eg:5000 each as an expense rather than 1 for 10000 due to the amount of tax actually paid by that person.

As for the points about splitting the 15000, the maximum relief according to their website is 7000 per course. Not per person. If you have already claimed the maximum relief for the course, then the second person cannot claim for it also. Again I may be mistaken, and it appears wrong and I suppose fraudelant.

I'd also be very surprised to see any College/University splitting receipts.

pc11

Pass the Sauce love wrote: »

I may be mistaken, but if the second person is claiming half the expenses then I think Revenue can include their portion of expenses as income for you, and such, you be taxed on this income. I may be wrong, but I'm sure I read something similiar before on a medical expense issue, where two people claimed eg:5000 each as an expense rather than 1 for 10000 due to the amount of tax actually paid by that person.

As for the points about splitting the 15000, the maximum relief according to their website is 7000 per course. Not per person. If you have already claimed the maximum relief for the course, then the second person cannot claim for it also. Again I may be mistaken, and it appears wrong and I suppose fraudelant.

I'd also be very surprised to see any College/University splitting receipts.

Oh, I wasn't expecting that! :eek: I've seen it discussed as pretty much a done deal on another forum! I didn't see the point about 'per course' until now, I wonder exactly what that means to Revenue. I tried to call them today but couldn't get through.

It also says this on that link: "An individual who pays fees to Private/Publicly Funded Third Level Colleges on behalf of him/herself or any other individual."

So, anyone can pay for anyone, thus, how can it be treated as income?

In any case, if I'm full-time and have no income, shouldn't I be ok on that front?

Pass the Sauce love

It does say any individual, but if someone pays lets say 9000 on your behalf for tuition fees, I presumed that the 9000 would be liable for some sort of gift tax, unless your a child of the person. I'm no expert. I'm just thinking out loud.......morally I think its wrong. Nothing against you personally. It's the Revenue's fault for having such open rules.

I've just viewed the pages they have on tuition fees and it does say any individual clearly, yet scroll down and it appears to repeat the word child a lot. It's very messy.

Ps, if your full time and have no income, you may need to change your career. people get more off the state for doing nothing.

Mr. Incognito

It is a credit against paye paid.

Do you have paye paid up to 7 k?

Annasopra

Yes - anyone can pay for anyone

pc11

Mr. Incognito wrote: »

It is a credit against paye paid.

Do you have paye paid up to 7 k?

7K refers to fees, not PAYE. The max you can claim is for 7K in fees, less 2K deduction, then 20% tax so 1K per year is the max can be claimed. I had a long chat with Revenue this week about it.

pc11

mango salsa wrote: »

Yes - anyone can pay for anyone

I'm just confirming this: after a long chat with Revenue, they are clear that anyone can pay fees for anyone, just like with medical expenses.

Does anyone know if anyone can pay VHI for anyone and get the tax credit?

Mr. Incognito

pc11 wrote: »

7K refers to fees, not PAYE. The max you can claim is for 7K in fees, less 2K deduction, then 20% tax so 1K per year is the max can be claimed. I had a long chat with Revenue this week about it.

It's a tax CREDIT. You credit it against tax. It is not a REFUND.

The first question is whether you have tax paid to credit it against.

pc11

Mr. Incognito wrote: »

It's a tax CREDIT. You credit it against tax. It is not a REFUND.

The first question is whether you have tax paid to credit it against.

Yes, obviously. Who said otherwise?

I was taking that as read since it should be obvious.

pc11

pc11 wrote: »

I'm just confirming this: after a long chat with Revenue, they are clear that anyone can pay fees for anyone, just like with medical expenses.

Does anyone know if anyone can pay VHI for anyone and get the tax credit?

Answering my own question: according to Revenue you can't pay health insurance for someone else and claim against tax, they must be on your policy. This is unlike 3rd level fees and medical bills where anyone can pay for anyone and claim.