Allocation of Tax credits (joint assessment)

tobdom

Hi there,

Hoping for some experienced insight into a query I have for a 'in the not too distant future' scenario.

I am a full-time permanent PAYE worker and my wife is/was also the same but she is currently on maternity leave. At the end of her maternity leave she will take some unpaid leave and ultimately she will likely cease her employment at the end of that (for various reasons).

We are currently jointly assessed as a married couple for tax purposes. My questions are as follows:

1. When my wife goes on unpaid leave, can we at that point allocate all of her tax credits to me, to increase my net pay?
2. How does the allocation of her tax credits to me work?
   1. Assuming her credits are the same as mine, would it (roughly) halve my deductions? (or is that way too simplistic)
   2. If my deductions are 'halved', is this only for PAYE deductions or for USC also? I assume I would pay the same PRSI?...
3. Anything else I haven't mentioned that we'd need to consider?

Thanks in advance for any input!

gerrybbadd

tobdom wrote: »

Hi there,

Hoping for some experienced insight into a query I have for a 'in the not too distant future' scenario.

I am a full-time permanent PAYE worker and my wife is/was also the same but she is currently on maternity leave. At the end of her maternity leave she will take some unpaid leave and ultimately she will likely cease her employment at the end of that (for various reasons).

We are currently jointly assessed as a married couple for tax purposes. My questions are as follows:

1. When my wife goes on unpaid leave, can we at that point allocate all of her tax credits to me, to increase my net pay?
2. How does the allocation of her tax credits to me work?
   1. Assuming her credits are the same as mine, would it (roughly) halve my deductions? (or is that way too simplistic)
   2. If my deductions are 'halved', is this only for PAYE deductions or for USC also? I assume I would pay the same PRSI?...
3. Anything else I haven't mentioned that we'd need to consider?

Thanks in advance for any input!

* You can't transfer all of the tax credits. In the main, you can get her Personal Tax Credit, worth 1650 worth of a deduction.
* You can get up to 9000 additional Standard Rate Cut Off Point from your wife. This reduces the amount of tax payable from 40 to 20%, by 9000.
* No reduction in USC
* No reduction in PRSI

tobdom

gerrybbadd wrote: »

* You can get up to 9000 additional Standard Rate Cut Off Point from your wife. This reduces the amount of tax payable from 40 to 20%, by 9000.

Thanks Gerry,

Just to ensure I'm interpreting this correctly.... So my cutoff of being taxed @ 20% would increase by 9k, correct?

Are you able to shed any light with regards to 'can get' and 'up to 9000' - what kind of factors determine if I would get the full 9k? And do I have to 'apply' for it, or would it happen automatically once my wife became unemployed?

Thanks again!

CiboC

Also bear in mind that maternity benefit is taxable (no USC or PRSI levied on it though).

tobdom

Thanks CiboC - I'm more so concerned about post-maternity leave; unpaid leave and ultimately leaving employment (at least for a time).

Her maternity benefit is currently paid to her employer and deducted from her salary.

Teebor15

Sorry to hi-jack thread but my situation is pretty much the same as tobdom's.

I'm a private sector PAYE worker and my wife is a HSE employee. She took full maternity leave from Jan followed by 4 months unpaid leave which is just coming to an end. We are jointly assessed but never switched tax credits. She thinks she will receive a decent lump sum in her first paycheck back to make up for any overpayment of tax whereas I think we need to request a balancing statement in Jan for 2016.

Which of us are correct..if any?

exaisle

If she goes back to work before the end of 2016, then she's correct. The employer will adjust and refund as necessary.

But she's always correct....have you not learned that yet? ;-)

Teebor15

Thanks exaisle. Yeah she goes back next week.

You would think I'd have learned by now!!

maidmarian

Im also going to kind of hi-jack post if thats ok! I am being made redundant the end of Feb but plan on starting Maternity benefit as soon as i finish as I am due baby in March. As I have no job to return to we are trying to figure out how to get the maximum level from our incomings. Would there be any benefit in my husband taking some of my tax credits from the offset or now the mat benefit is taxable do I need it myself?