Assessable Spouse

Gusser09

Hi folks. I know that this has been discussed before but id appreciate a little help on it. My ciscumstances are a little different and i find the transfer of credits and bands a little confusing if im honest.

I work and my wife gets carers allowance. Currently on single assessment.

I am in receipt of the incapacitated child tax credit and dependent relative credit.

2022 gross pay is as follows

51585 - me ( salary)

13200 - wife ( carers allowance)

I am going to pay tax of €6344

Jointly assessed we would pay €3769

Are my sums correct? The above joint assessed figure is from the pwc calculator.

We are also entitled to the home carer tax credit but i know you can only get this or the increase in the standard band.

Should i take all of her tax credits and increase in the standard band?

If i am the assessable spouse i understand it that i will be taxed? They wont take money from her payment every week. Is this correct?

Also i believe we will be due a refund for previous years.

In 2019 for example our pay was

45050 me

14030 wife

Tax credits were the same ( incapacitated child)

Should i just select to be the assessable spouse and will revenue do the rest?

Any help with this greatly appreciated.

Ciaran

If your wife's only income is carer's allowance, you should transfer all credits and rateband to you. This should happen automatically when you register for joint assessment.

Tax is never deducted from social welfare payments, it'll be done on your wages. What you should see on your tax credit cert is your standard rateband increase by 9,000 and your credits increase by 3,400 (your wife's credits) and decrease by 2,640 (20% of your wife's income of 13,200), so a net increase of 760. That's a saving of 2,560 over the year.

The home carer credit will be of no benefit to you, all of your wife's income would be taxed at 40% instead of 20% which would add more tax due than the credit is worth.

Gusser09

Thanks ciaran. Thats savage info. Id been looking at it but scratching my head for a while. Thought it to good to be true. Will also get them to look back over the last 4 years. We should be due a decent refund. Much appreciated thanks.

Gusser09

Hi Ciaran / Folks.

So I got a refund for 4 year which was great but looking at my new TCC for 2022 it doesn't look great. See below. So they have reduced the standard rate band by the amount my wife gets from her carers allowance. I have attached the original tcc for 2022 and the new one below it. Can't get my head around it at all. Doesn't make sense that I would pay more tax than I am currently paying?

Any income over 26712 taxable at 40% ?

Any information or help would be great.

I thought the rate band would increase by the carers amount.

Gusser09

https://www.boards.ie/discussion/comment/119688682#Comment_119688682

Doesnt make much sense that they owe me 11k for the previous 4 years yet i owe them money for this year.

Ciaran

https://www.boards.ie/discussion/comment/119717022#Comment_119717022

This definitely isn't right. I would go into your myaccount on the revenue site and see what you can transfer. 9,000 standard rate band should be available at a minimum but I'm not sure if you can transfer the carer's allowance amount. You'll probably need to contact revenue to get it fully fixed unfortunately.

Gusser09

https://www.boards.ie/discussion/comment/119717574#Comment_119717574

Yeh its mad. There is no way i can bw owed money for over payment for the last 4 years but then owe them money for this year.

See statement of liability for last year for example.

Geuze

The tax band 36,800 is for a single person.

Is that a mistake in the new TCC?

Geuze

Note that the first TCC is for one person, there is one column.

The new TCC has two columns, one for you, one for spouse.

The tax credits look more correct in the second TCC, which is good.

Are you missing any flat-rate expenses tax-free allowance? That depends on your job.

The tax band in the second TCC looks like 36,800 has been allocated to you, and 36,800 allocated to your wife?

Gusser09

Hi Geuze. Many thanks for the response. It doesnt make much sense to me tbh. I have emailed Revenue to clarify. Im pretty sure that i cant actually owe more tax considering i have been refunded 11k for the last 4 years. I was single assessment but they went back and jointly assessed. I just panicked when i saw the band being reduced to 26k. To my mind the new band should be the married band + the carers allowance which would bring it up and not down.

Gusser09

Currently paying 244 per fortnight in paye. My maths say i should be now paying 121 per fortnight.

My salary is 51585 and wifes carers is 10088.

I will add the home carer tax credit to the record but that cant be claimed with the standard rate band increase which is fair enough.

limos

I am confused too by my husband tax cert we are jointly assessed as a married couple and dont understand how mu carers allowance has reduced his rate band to 33k anything over this will be taxed at 40% it isnt worth my while getting carers if he then gets less wages

Gusser09

https://www.boards.ie/discussion/comment/119767477#Comment_119767477

Im not sure tbh. Havent heard back from them on it. Id assume its incorrect. I received a refund for the last four years for nearly 11k. So no way i can get less money this year with everything adjusted.

limos

Yes I only got an increase this August as I now care for for daughter and father inlaw so when I informed them, this is what I noticed, that my carers allowance brought my husbands credits way down and dropped his cut off from €45,000 to €28,000 which means i am being taxed on my carers allowance at 40%

limos

Do you think this is correct its mad that my carers allowance reduces our rate band by so much

B91B6F1B-1FDC-4AC8-98C4-08BC60898335.png

limos

Hi just seen your reply there I have the same issue with my tcc my rate band went down to 28k from 45k when my wife’s carers allowance got added, surely this is not right, maybe it is but its not worth a families while claiming for carers allowance if you get taxed so much on it

AEB05BFD-DD68-493D-9D57-45BD86DBE0AD.png

relax carry on

https://www.boards.ie/discussion/comment/119769038#Comment_119769038

Its the presence of the home carers tax credit that leaves you with no rate band meaning the DSP payment will be taxed at 40% minus your employee tax credit. If you remove the home carers credit of 1600 euro off your spouse then you get your rate band back.

Gusser09

https://www.boards.ie/discussion/comment/119769210#Comment_119769210

Id have thought revenue would automaticaly applied the rate band rather than the credit though. They'd usually do what is most advantageous. They did for the last 4 years. I'll have a look anyway.

Gusser09

Im not actually claiming the hame carers credit. either is wife.

Strangely on my manage your tax 2022 homepage it tells me the rate band is 45800 @ 20%

limos

Thank you i just emailed the tax and they said to take the home carers credit off now would result in a large underpayment so wait until the end of the year to decide what to do, I need to find out which would be more advantageous to us

limos

would that be the best way to go it is hard to find anything online that helps calculate your tax

Gusser09

https://www.boards.ie/discussion/comment/119774648#Comment_119774648

Pwc calculator should be thrtr or there abouts with calculation.

I think the Tax Cred Cert could be a bit clearer. On one hand it says the standard single rate band is lowered by the carers amount. On a seperate column it tells me my rate band is 45800 taxed at 20%. Just confusing.

Gusser09

https://www.boards.ie/discussion/comment/119717022#Comment_119717022

Just on this folks Revenue have acknowledged a mistake on their part and the rate band should indeed be 45800. They have sent out a new tcc.

Gusser09

Amended cert for anyone interest.