Earned Income Tax Credit

Sunny Dayz

I understand that proprietary directors cannot claim the PAYE tax credit but can claim the new Earned Income Tax credit. But does anyone know if the Earned Income Tax Credit can be claimed by the spouse of a proprietary director earning a salary from the company, whom I know cannot claim the PAYE tax credit? There's very little info on the Revenue website and the only guidance they give in relation to joint assessment shows both spouses earning trading income in their own right.

adrianw

Sunny Dayz wrote: »

I understand that proprietary directors cannot claim the PAYE tax credit but can claim the new Earned Income Tax credit. But does anyone know if the Earned Income Tax Credit can be claimed by the spouse of a proprietary director earning a salary from the company, whom I know cannot claim the PAYE tax credit? There's very little info on the Revenue website and the only guidance they give in relation to joint assessment shows both spouses earning trading income in their own right.

I understand it is for self employed (sole traders) and proprietary directors only. So if both spouses were proprietary directors - yes, but if one was an employee then no.

scheister

From looking at my payroll clients it is giving the 550 as standard if you don't get the 1650 PAYE . That's for both the directors and spouses.

SRASE

It applies where an individual has "earned income" but is not entitled to the PAYE credit. Earned income is set out in Section 3 TCA 1997.

This includes income from employment. So a spouse of a proprietary director would be entitled to the earned income tax credit on any salary from this company provided they not entitled to the PAYE credit for any other income.