Tax Credit - Irish Pension & USA Pension

What tax credits would a person be entitled to if they are 78, widowed 10 years ago, have an Irish contributory state pension and an American state pension to total €25,000 per year? They are not a carer.

There is the Personal Tax Credit of €2,190 and the age tax credit of €245.

Would they be entitled to any other tax credit by virtue of their American state pension as it is taxable income in Ireland (where they are resident and domiciled) such as the Earned Income Tax Credit of €1,650?

Stratvs

They would get the Employee Tax Credit €1,650 by virtue of the Irish DSP income.

So they'd have €2,190 + €1,650 + €245

https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/income-and-employment/employee-tax-credit/index.aspx

The Earned Income Tax Credit would not apply.

Are you sure that every person getting the Irish state pension and a USA state pension gets the Employee Tax Credit? This 78 year old person has an accountant submit their tax return each year and I see from their 2021 tax credit certificate that they are only getting the Personal Tax Credit €2,190 and the Age Tax Credit €245.

If what you are saying is true then this person could be due a tax refund of €6,600 [€1,650 x 4] which would be a lot of money to this person.

SureYWouldntYa

https://www.boards.ie/discussion/comment/117975650#Comment_117975650

Tax Credits are not refundable, they can reduce the liability but they can't be refunded, and any amounts unused cannot be carried forward either.

Tax Reliefs/Deductions such as medical expenses are refundable

Stratvs

https://www.boards.ie/discussion/comment/117975650#Comment_117975650

As other poster said tax credits aren't refundable but reduce net tax to a point where it may become nil but not into a minus/refund. However in your original post you said that total income was around €25,000 pa. So if we assume :-

Irish state pension €12,500 + USA pension €12,500 = Total €25,000

Tax on that at 20% would be €5,000

Tax Credits €2,190 widowed + €1,650 PAYE/Employee + €245 age = €4,085.

Net Tax payable €915.

However say total income was only €20,000 with gross tax at 20% then becoming €4,000. While tax credits entitlement may be €4,085 once credits cover any tax due that's the end of them, you can't get the remaining €85 back also. In that case the person would just have a nil liability.

As linked previously a person in receipt of DSP pension is entitled to the EE tax credit ( to the extent that it helps above ) .

https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/income-and-employment/employee-tax-credit/index.aspx

You also mentioned their Tax Credit Certificate not referring to the EE credit. If the person's only income is Irish state pension and USA state pension I don't see where a tax credit certificate comes in as that would only apply if they had an Irish employment/employer pension. However they would likely be filing a Form 11 and getting a Ch4 self-assessment from Revenue. When you file a Form 11 you must specifically tick the entitlement to the EE tax credit or it will not be granted. It may be worth checking on what was filed.

Also, while medical expenses are refundable, it's again only to the extent that there is net tax paid to set them against. If tax is already brought to nil though being covered by existing tax credits, then medical expenses will not produce anything further.

It was claimed in previous years on the Form 11 that I see now from looking into it further. Thank you for your advice.