Tax credit for tuition fees unfair

SwordofLight

Hi all,

I'm a bit confused about tution fee tax credits.

Take this example - If I pay €7k or higher in tuition fees over the year, I can claim the maximum amount back say X.

But if I were to have a deficit due to poverty and end up paying the tuition fees late - in the following year, e.g. €14k, I can still only claim the maximum of X.

So in fact what happens is a hefty tax credit loss because the fees are paid late.

Is this not an example of the poor becoming poorer as a result of a being unable to avail of the tax credit were they to have the money first time.

I would be inclined to advise a staggered entry of the money paid, i.e. even if the full monies have been paid, split the declaration of the monies into different years so as to avail of the full tax break.

Technically I don't think this is breaking the law, as the fees were paid.

LaQuica

Your tax return for 2020 is due in October 2021 - I don't think there would be an issue including fees paid for the 2020/2021 academic year even if you paid them during second term (2021).

Stratvs

Perhaps I'm reading this question wrong so please excuse me if I am. However a tax credit is just that. A credit against tax paid/payable. If the claimant's income is so low as to not warrant payment of tax anyway then the Tax credit is of no use anyway. A single person's tax credits are €1,650 personal plus €1,650 PAYE (when employed) so total of €3,300 which is equivalent to €16,500 in income before any tax is paid at all. There would have to be taxable income of €20,500pa to have €4,000 taxable ( €7,000 less €3,000 disregard ) for the amount of tax paid/payable to be equal to the relief due ( which is €800 taking €4,000 at 20% )

https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/education/tuition-fees-paid-for-third-level-education/paying-tuition-fees-in-instalments.aspx

This is a good guide on the issue.

mystic86

SwordofLight wrote: »

Hi all,

I'm a bit confused about tution fee tax credits.

Take this example - If I pay €7k or higher in tuition fees over the year, I can claim the maximum amount back say X.

But if I were to have a deficit due to poverty and end up paying the tuition fees late - in the following year, e.g. €14k, I can still only claim the maximum of X.

So in fact what happens is a hefty tax credit loss because the fees are paid late.

Is this not an example of the poor becoming poorer as a result of a being unable to avail of the tax credit were they to have the money first time.

I would be inclined to advise a staggered entry of the money paid, i.e. even if the full monies have been paid, split the declaration of the monies into different years so as to avail of the full tax break.

Technically I don't think this is breaking the law, as the fees were paid.

What an odd question.

7k is the maximum. If you pay 14k in one year then that's capped at 7k. If your course allows you to pay 2 instalments of 7k in 2 different years, that that makes it better in terms of getting tax back. If you don't pay the fees on time and pay both instalments in 1 year, then that's on you. The rule is the same for everyone, tax is not administered, in general, on a case by case basis.

SwordofLight

Thanks for the replies.
Mystic - Why does it sound odd? Pretty straight-forward I think.

"If you don't pay the fees on time then that's on you." Yes, thus why I've said if someone were unable to pay it on time (which can happen due to a multitude of issues not the person's fault), they will lose out. These issues are usually to do with that someone being in a difficult position financially.

Stratvs - sadly it's very possible to have a decent taxable income salary and still struggle financially.

mystic86

SwordofLight wrote: »

Thanks for the replies.
Mystic - Why does it sound odd? Pretty straight-forward I think.

"If you don't pay the fees on time then that's on you." Yes, thus why I've said if someone were unable to pay it on time (which can happen due to a multitude of issues not the person's fault), they will lose out. These issues are usually to do with that someone being in a difficult position financially.

Stratvs - sadly it's very possible to have a decent taxable income salary and still struggle financially.

So do you think I should be able to change the rules to suit my personal circumstances in order to maximise my tax saving, and so should everyone else, 3m people doing what suits them best?

The rules are a catch all, there's always some issues or outliers whenever you have to draw a line somewhere.

AnRothar

This was also discussed here.
They got clarification on paying over 2 years.
It's per academic year.

Will Yam

SwordofLight wrote: »

Thanks for the replies.
Mystic - Why does it sound odd? Pretty straight-forward I think.

"If you don't pay the fees on time then that's on you." Yes, thus why I've said if someone were unable to pay it on time (which can happen due to a multitude of issues not the person's fault), they will lose out. These issues are usually to do with that someone being in a difficult position financially.

Stratvs - sadly it's very possible to have a decent taxable income salary and still struggle financially.

You could try appealing it to the Tax Appeals Commission.

But I dont think you will get very far. If the rules are black and white (and do not require Revenue interpretation ) they will look at the rules and if you have followed them fine. If you haven’t followed them - and it appears you haven’t in this case - then tough.

exaisle

Dont waste your time with the appeal commissioners...