Maximizing credits; can I use both PAYE and earned income credit?

CGI_3 · 21-10-2018 08:12PM #1

If I have a PAYE income, Earned income as a sole trader, and rental income, can I maximise all three as below?

E.g.,

Gross Age related 25% Pension Contrib Taxable 20% income tax Tax credit (per 1st column) Income tax owed
PAYE offset by PAYE credit 11000 2750 8250 1650 1650 0
Earned income offset by earned income credit 9000 2250 6750 1350 1350 0
Rental income offset by remaining personal credit 8250 not allowed 8250 1650 1650 0

Ignoring USC and PRSI of course, is the above scenario possible? Or is there some limitation on the application of the earned income credit if availing of the PAYE also?

namenotavailablE · 21-10-2018 08:18PM

Unfortunately not.

This page (link) indicates that in a scenario such as you describe, the total of the Employee + Earned Income credit cannot exceed the employee credit amount. That restriction covers a situation where you earn a small amount of both salary income (so wouldn't get the full Employee credit as it's restricted to 20% of your salary income) and also trading income- essentially, the maximum credit is capped at 1650 for such situations.

CGI_3 · 21-10-2018 08:21PM

Thanks for that link. It's quite clear alright unfortunately!

Maximizing credits; can I use both PAYE and earned income credit?

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