Home Carer Tax Credit for Childminder

DerryRed

I am a PAYE worker and my wife is self employed as a registered childminder. We are currently getting the Home Carer Tax Credit of €810 as my wife minds our children at home in addition to the child she minds as part of her childminding service.

The normal rules for the home carer credit is that if the home carer's income is over €5,080, then the amount of credit is reduced on a sliding scale up to an income of €6700. If income is over €6700 then you are not eligible for the credit.

I wanted to check if we will still be eligible for the credit if she exceeds this income limit of €6700, as it is our understanding that childminders who also mind their own children, can still avail of the home carer tax credit so long as their income is not over €15,000.

allthedoyles

If your spouses income exceed €6700 you cannot claim home carer tax credit - end of story

The childcare services relief for income less than €15000 is different kettle of fish .

DerryRed

allthedoyles wrote: »

If your spouses income exceed €6700 you cannot claim home carer tax credit - end of story

The childcare services relief for income less than €15000 is different kettle of fish .

Thanks for your feedback allthedoyles.

Back in January I was on the phone with a Revenue employee and explained our situation i.e. my wife was at home minding our children and that she was starting childminding. I explained the financial situation i.e. her income would be approx €10,000 for the year and she said we would be eligible for the Home Carer Tax Credit and assigned it to us.

From your reply above it looks like this should not have been done. Does this mean when my wife does her self assessment next year for 2015 and declares income of approx €10,000 we will be asked to pay back the €810 Home Carers Credit we received this year?

allthedoyles

Not really sure 'cos in our case spouses income was less than €6,700 .

But there are occasions when home carer can be claimed and income exceed €6,700.
For instance if it was claimed in previous year.

Read this from www.revenue.ie website :

If the home carer's income exceeds €6,700 in the next year, the tax credit will still be due for the year, provided that:

• the other conditions for the tax credit are met, and

the tax credit was granted for the immediately preceding tax year.

The amount of the tax credit is restricted to the amount granted for the immediately preceding tax year. However, if the couple claim the increased standard rate band for dual income couples, the home carer's tax credit will not be due.

This is also important :

Can couples in a marriage or civil partnership claim both the Home Carer's Tax Credit and the increased Standard Rate Band for dual income couples?

No. But they can claim whichever of the two is more beneficial. In practice, Revenue will grant the more beneficial treatment.

So if your income exceed the amount , I would ask the tax office to process P21 to include Home Carer , and they should give you whichever is more beneficial .

DerryRed

I spoke with someone from Revenue over the phone. She wasn't sure and said she'd look into it and call me back. She called back and said yes we were entitled to it as there is a special exemption for childcarers who also mind their own children at home. So that's two Revenue employees who have told us verbally that we are entitled to it.

Still waiting on the reply to the email I sent Revenue about this, early last week. I’ll take more stock in something in writing than being told verbally.

danmanw8

That suggests that income from childcare services in your home is disregarded entirely for all tax purposes? (as long as it's under €15k per annum)

DerryRed

Here is the reply I got from Revenue via email

As your spouses income is considered exempt and not taxable, it does not come into the equation for determining the home carers tax credit.

So once her income does not exceed the 15,000 for child minding services, then you still qualify for the Home carers credit.