What Is A Tax Credit?

A tax credit is an item that directly reduces the amount of tax you pay in a full tax year. Some credits are given automatically and others you must claim. You can’t refund any unused credits or carry them over into another year.

We’ve compiled a list of the tax credits your startup could avail of below.

Aged Tax Credit

If you are 65 years or older in the tax year you can claim the Age Tax Credit. You can also claim the Age Tax Credit for a couple if you, your civil partner or spouse is over 65. In the tax year that you turn 65, you will be automatically granted the Age Tax Credit.

If you are single, widowed, or a surviving civil partner, the age credit is €245 per year.

If you are married or in a civil partnership the tax is €490 for the couple.

Dependent Relative Credit

This credit can be claimed if you care for a relative at your own expense.

The relative you claim for must be unable to care for themselves due to incapacity by old age or infirmity, you or your partner’s parent or you or your partner’s child whose services you depend on due to your old age or infirmity.

Unless you are claiming for your child who is caring for you, your relative does not need to live in Ireland to qualify for this credit.

You can receive a tax credit of €70 unless your dependent relative’s income exceeds €14,753.

One Parent Family Tax Credit

This tax credit is available to a single parent, or to someone who has custody of and maintains a child who is living with them.

This can include someone who is widowed, single, a surviving civil partner, deserted, separated from their spouse or civil partner, divorced or whose civil partnership has been dissolved.

This credit is €1,650 per year and will reduce the tax you pay by €31.73 per week.

Home Carers Credit

A Home Carer Tax Credit is given to married couples or civil partners where one spouse or civil partner is the Home Carer and cares for one/more dependent persons. The dependent person cannot be your spouse or civil partner.

You can claim Home Carers Credit if you and your partner are jointly assessed for tax, one of you works in the home caring for the dependent and the home carer’s income is under €7,200. If the home carer’s income is between €7,200 and €9,600 then a reduced tax credit applies.

The Home Carers Credit will rise in 2019 from €1,200 to €1,500.

Married Or Civil Partners Tax Credit

If you and your partner or spouse are jointly assessed, or if you are separated or divorced and you pay enough voluntary maintenance to maintain your spouse or civil partner you qualify for a Married or Civil Partners Tax Credit.

The tax credit for a married person or civil partner is €3,300.

Medical Expenses

You can claim tax relief online using Revenue’s PAYE Anytime service. You can only claim for medical expenses if you have receipts to prove your claim.

You cannot claim relief if you will receive payment from your insurance provider, a public or local authority such as the HSE or any compensation payment.

Usually, you will receive tax relief for medical expenses at your standard rate of tax (20%).

You can use Medical Form MED1 to claim tax relief on all general medical expenses, including dental expenses.

Nursing Home Expenses

Income tax relief is available on fees for nursing homes. If you are paying the fees for a nursing home, you can claim the tax relief whether you are in the nursing home or you are paying for someone else to stay there.

If the nursing home provides 24-hour on-site nursing care you will receive tax relief for at a rate of 40%.

Third Level Fees

Tax relief is available per student, per course and per academic year. Relief comes at the standard rate of income tax (20%). The maximum fee you can claim is €7,000 per student per course.

However, relief is not due on; administration fees, examination fees or registration fees. Or any part of the fees that grants, scholarship, an employer or other covers.

Incapacitated Child Tax Credit

You can claim this credit if you have a child who is permanently incapacitated, either physically or mentally and unable to support themselves.

You can claim this credit by completing Form ICC1. You will also need to get a certified Form ICC2 from the child’s medical practitioner.

The rate for this credit is €3,300.

Single Person Child Carer Tax Credit

If you care for a child on your own, you may be entitled to the Single Person Child Carer Tax Credit. The child must be under 18, or if over 18 be in full-time education.

The value of this tax credit is €1,650 per year.

Widowed Parent Tax Credit

A widowed person, or a surviving civil partner, with one or more dependent children, can claim this tax credit.

This credit is granted in addition to the Widowed Person or Surviving Civil Partner’s Tax Credit and can be claimed for 5 years after the year of death of a spouse or civil partner.
Only one tax credit is provided, regardless of how many children there are. With this tax credit, you may also qualify for the Single Person Child Carer Credit.

The Credits Are Broken Down A Followed

  • €3,600 in the first year
  • €3,150 in the second year
  • €2,700 in the third year
  • €2,250 in the fourth year
  • €1,800 in the fifth year

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