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Home Carer Tax Credit

  • 03-01-2020 9:42pm
    #1
    Turkish1
    Registered Users, Registered Users 2 Posts: 273 ✭✭


    Hi

    Can't seem to find clarification on Revenue or elsewhere.

    Currently expecting child no3 so assessing options in relation to my OH staying at home rather than working.

    I know that in this instance at a minimum she would be entitled to claim the personal tax credit and also the carers allowance of up to €1,600.

    Given her current occupation there is a high degree of flexibility in terms of doing some limited hours (and a need to also in order to keep skills up to date for a future return to work a few years down the line).

    Would it be possible for my OH to work on a limited basis and earn €7,200 - while claiming the following:

    Employee Tax credits of €1,440 (20% max of earnings if under €8,250). Not transferrable but use these against my OH's income so no PAYE would be payable.

    Standard personal tax credits €1,650 - transferrable and transfer to myself

    Full Home Carers allowance, the threshold of €7,200 for max credit of €1,600. Is this transferable as would not need to be used for OH's taxes.

    I strongly suspect that it is a case of either the employee tax credit or the home carers but not both as it seems too favourable but I can't find clarification anywhere.

    Any thoughts/info appreciated.


Comments

  • #2
    November Golf
    Registered Users, Registered Users 2 Posts: 973 ✭✭✭November Golf


    Turkish1 wrote: »
    Hi

    Can't seem to find clarification on Revenue or elsewhere.

    Currently expecting child no3 so assessing options in relation to my OH staying at home rather than working.

    I know that in this instance at a minimum she would be entitled to claim the personal tax credit and also the carers allowance of up to €1,600.

    Given her current occupation there is a high degree of flexibility in terms of doing some limited hours (and a need to also in order to keep skills up to date for a future return to work a few years down the line).

    Would it be possible for my OH to work on a limited basis and earn €7,200 - while claiming the following:

    Employee Tax credits of €1,440 (20% max of earnings if under €8,250). Not transferrable but use these against my OH's income so no PAYE would be payable.

    Standard personal tax credits €1,650 - transferrable and transfer to myself

    Full Home Carers allowance, the threshold of €7,200 for max credit of €1,600. Is this transferable as would not need to be used for OH's taxes.

    I strongly suspect that it is a case of either the employee tax credit or the home carers but not both as it seems too favourable but I can't find clarification anywhere.

    Any thoughts/info appreciated.

    You are correct that your OH can only claim the Employee Tax Credit or the Home Carers Tax Credit. However you should also note that claiming the Home Carer Tax Credit may reduce your standard rate cut off point (this is the point at which you start paying tax at the marginal rate of 40%).

    Check out the link below for more information:
    https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-29.pdf


  • #3
    Turkish1
    Registered Users, Registered Users 2 Posts: 273 ✭✭Turkish1


    Mike Foxtrot wrote: »
    You are correct that your OH can only claim the Employee Tax Credit or the Home Carers Tax Credit. However you should also note that claiming the Home Carer Tax Credit may reduce your standard rate cut off point (this is the point at which you start paying tax at the marginal rate of 40%).

    Check out the link below for more information:
    https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-29.pdf

    Thanks, couldn't find that doc previously. Makes it fairly clear cut, thanks.


  • #4
    Berberis
    Registered Users, Registered Users 2 Posts: 794 ✭✭✭Berberis


    Mike Foxtrot wrote: »
    You are correct that your OH can only claim the Employee Tax Credit or the Home Carers Tax Credit. However you should also note that claiming the Home Carer Tax Credit may reduce your standard rate cut off point (this is the point at which you start paying tax at the marginal rate of 40%).reduced though

    Check out the link below for more information:
    https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-29.pdf

    Not too sure if this true or not. Hasn't been in my case for all the years we have ben receiving it.
    Usually my wife's employee tax credits have been reduced to 20% of what her annual income was for the year and then I have been receiving the personal Tax credit of €3,300, also employee tax credit of €1,650 plus the full home carers tax credit.
    My standard cut of rate is reduced though.

    On a separate note we cannot claim the credit for dependent child anymore due to them having grown up.
    However we do look after an 89 yr uncle of my wife's (has no family, never married) who has early dementia and lives across the road from us. We do quite a lot for him daily and were wondering if we could apply for the home carers credit for this.
    Have no interest in applying for carers allowance or anything like that


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