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What are tax credits?

Tax credits can be deducted from your tax bill.

Everyone receives personal tax credits. Depending on your circumstances you may be entitled to other tax credits.

Here are 10 commonest tax credits:

1. Single person child carer credit

The Single Person Child Carer or Single Parent tax credit is for single parents, or if you maintain a child who is living with you.

This can include people who are:

  • widowed
  • single
  • deserted
  • separated from their spouse
  • divorced

This credit is €1,650 per year and is worth €31.73 per week off your tax bill

2. Incapacitated child tax credit

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

To claim this credit you will need to complete Form ICC1

You will also need to get a certified Form ICC2 from the child’s medical practitioner.

This credit is worth €3,300 per year

3. Married Tax Credit

You can qualify for the Married Tax Credit if:

  1. You and your partner/spouse are jointly assessed or if you are
  2. Separated / divorced and you pay voluntary maintenance to your spouse

The Married Tax Credit €3,300 per year

4. Medical expenses

You can claim tax relief on medical expenses using Revenue’s PAYE services which is called myAccount.

You can claim tax relief on medical expenses, including dental expenses, once you have your receipts.  In the case of Dental Expenses you will need to get a Form MED2 from your dentist stating how much you paid them.

If your health insurance policy pays some of your medical expenses, or if the HSE pay you or you get any other compensation payment you cannot claim medical expenses.

You will get tax relief for medical expenses at the standard rate of tax of 20%.

6. Third level fees

You can get tax relief for university fees. Relief is available per student course and academic year and the maximum you can claim is €7,000.

Relief is not available on administration fees, examination fees or registration fees.  Unfortunately most of the cost of thrid level fees fall under these headings

The relief will not cover any fees that a grant, employer or scholarship pays.

Relief comes at the standard rate of income tax which is 20%.

6. Widowed parent tax credit

A widowed person with dependent children can claim this tax credit.

You can get this credit as well as the Widowed Person Tax Credit and you can claim this credit 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.

You can also qualify for the Single Person Child Carer Credit with this credit.

The credits are as follows:

  • €3,600 in the first year after bereavement

  • €3,150 in the second after bereavement

  • €2,700 in the third year after bereavement

  • €2,250 in the fourth year after bereavement

  • €1,800 in fifth year after bereavement

7. Home carers credit

If one partner in a marriage is a Home Carer, you can claim the Home Carer Credit.  The dependent person cannot be your spouse.

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 rate is €1,500.

8. Age 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 and your spouse are over 65.

You will be automatically granted the Age Tax Credit in the tax year that you turn 65.

If you are single or widowed, the Age Tax Credit is €245 per year.

The Age Tax Credit is €490 for a couple if you are in a marriage or civil partnership.

9. Nursing home expenses

You can get Income tax relief on fees for nursing hoomes.

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

10. PAYE Allowance

If you have an employment i.e. you are employed by an employer and you do not own shares in the company then you should qualify for the PAYE ( Employees ) allowance.

This allowance is worth €1,650 per year in tax credits which will be deducted from your tax bill.