Tax Credit, and Claims ?!

huud

Hi,

I have been paying taxes since Jan 2020, and some things I'm not able to understand.

1) What is a Tax Credit ? (as I understand this is the amount I pay as Tax, I have Employee Tax Credit and Personal Tax Credit)

2) What does it mean to Claim Tax Credit for previous year ?, am I understanding correct that if I make a claim for the previous year, the previous year's tax amount paid (in this case 2021) will be reimbursed to me ?

3) What is a Income Tax Return, what is it used for ?

My taxes are company managed under PAYE, am I suppose to do anything ?

Sorry where I came from there are no taxes to deal with.

relax carry on

https://www.boards.ie/discussion/2058257930/tax-credit-and-claims

You don't have to deal with it here either if you are just an employee. It's done through payroll. However if you have additional non PAYE income, or wan to claim additional tax credits/reliefs outside of the normal ones or you have been asked by Revenue; you should file an annual tax return. The link below should assist.

https://www.revenue.ie/en/life-events-and-personal-circumstances/moving-to-or-from-ireland/moving-or-returning-to-ireland/the-tax-system-in-ireland.aspx

downtheroad

A tax credit is a reduction in the amount of income tax (not USC or PRSI) that you pay. Effectively it means you don't pay any income tax on the first €17,000 that you earn (in 2022). Your income tax is calculated via payroll and you will see a tax credit on your payslip which reduces the income tax that is withheld from your pay.

If you want to claim tax relief on things such as medical expenses, work from home expenses, third level tuition fees and more you will need to file an income tax return. You aren't required to do this but you will receive a sum back from Revenue if you've overpaid tax in a tax year.

huud

Thank you for clarifying,

Just to be clear, what I meant was where I come from there are no taxes at all to deal with, so the tax system is new to me, and is quite confusing.