The end of the calendar year is a good time to assess what tax reliefs and credits you are entitled too. In Ireland, if your only source of income is from employment, the tax liable is paid in full though the PAYE (pay as you earn) system. An employer is obliged to deduct income tax, PRSI and USC (universal social charge) from your salary under the PAYE system. An individual who is in receipt of only PAYE income doesn’t need to make an annual tax return to Revenue.
Your preliminary end of year statement shows whether you have paid the correct amount of income tax and USC for the year. This is based on your income and deductions as reported by your employer or pension provider.
Tax credits reduce the amount of tax you pay. The tax reliefs and credits depend on your personal circumstances and vary for different individuals. The best time to claim a tax refund is usually January or February after the end of the previous tax year (which runs from 1 January to 31 December just like the normal calendar year).
You can also claim a refund going back up to four years, so in 2023 you can claim a refund as far back as 2019. There are a number of tax credits and reliefs available that will reduce the amount of tax you pay, this could ultimately lead you to make financial savings.
Tax credits
Tax is calculated as a percentage of your income. Your tax credits are deducted from this to give the amount of tax that you have to pay.
It was announced in Budget 2023 that the following tax credits for 2023 will increase by €75 to €1,775:
Personal tax credit.Employee tax credit.Earned income tax credit.The home carer tax credit will increase by €100 to €1,700.
Medical expenses
Credit is available at 20% for non-recoverable medical expenses incurred. The tax relief is available to the person paying the fees.
There is a list of all qualifying health expenses on the Revenue website as certain items are not allowed. You can only claim for expenses that you have receipts for. You can claim relief on the last four years’ health expenses.
Tax relief is also available on fees paid for nursing homes. You can claim tax relief for nursing home fees under the general scheme for tax relief on medical expenses. If you paid nursing home fees, this relief is deducted from your total income.
The portion of your income which is taxable at your highest rate of tax is reduced meaning, the amount of relief is at 40% or 20% depending on the amount of tax you paid at either rate.
There also are a number of other tax reliefs carers and people with disabilities are entitled to.
Tuition fees
You may be entitled to claim tax relief on tuition fees paid for approved:
Undergraduate courses.Postgraduate courses.Information technology (IT) and foreign language courses.There is a full list on the Revenue website of courses and colleges approved for this relief. You can claim the relief as long as you have paid the actual fees, either on behalf of another person or for yourself. The maximum amount of fees that qualify for tax relief is €7,000 per person per course.
Full-time student: There is no tax relief on the first €3,000 spent on tuition fees (including the student contribution) for the 2022-2023 academic year.
Part-time student: There is no tax relief on the first €1,500 spent on tuition fees (including the Student Contribution) for the 2022-2023 academic year.
More than one student: If you are claiming for more than one student, you will get full tax relief on tuition fees (including the Student Contribution) for the second or subsequent students.
Example
Conor pays tuition fees of €5,000, the student contribution of €3,000 and student levy of €300 for a full-time course. He pays a total qualifying fee of €8,000. The student levy of €300 does not qualify for relief. The maximum he can claim for the course is €7,000
Conor’s calculation of relief:
Qualifying fee: €7,000
Deduct full-time disregard amount: €3,000
Amount relief applies to: €4,000
Tax relief received (20%): €800
Housing tax reliefs
It was announced in Budget 2023 that a new rent tax credit will be introduced. If you are paying for private rented accommodation, you can claim a tax credit of €500 a year for 2022 and subsequent years. This tax credit applies to each tenant rather than each tenancy. For rent you pay in 2022, you will be able to claim this credit early in 2023.
If you rent out a room or flat in your home, you are exempt from income tax on the amount that your tenant pays you for the rent and other services, up to €14,000 in a tax year. This is known as rent-a-room relief and it only applies to residential tenancies, not to short-term guest arrangements.
Employment-related reliefs
Apart from the employee tax credit of €1,775 that is deducted by your employer on behalf of revenue, there may be other employment related reliefs you qualify for. Some work expenses can be deducted from your income before it is assessed for tax.
If you are a member of an approved pension scheme, you can get income tax relief on your pension contributions to the scheme. The rate of tax relief is at the highest rate of income tax you pay, also known as the marginal rate.
There is a limit to the overall value of your pension fund that you can get tax relief on in a year, these increase as you get older.
The maximum amount of gross income taken into account to calculate the percentage is €115,000. If you are a professional or sports person who retires at an earlier age, you can get 30% tax relief on your net relevant earnings regardless of your age.
Annual limit
Age limited to
under 30 15%
30-39 20%
40-49 25%
50-54 30%
55-59 35%
60 or over 40%
Tax reliefs following a death:
The treatment of tax reliefs following a death depends on the civil status of the deceased person and on the way, they were taxed if married or in a civil partnership. Additional tax credits are available to widowed persons and surviving civil partners.
Income tax return
Once you know what tax reliefs/ credits you are entitled to you can claim this credit through revenue if you earned tax under the PAYE system.
The easiest way of doing this is to log into your account and request a statement of liability. You will then need to select “Maintenance Payments Made” in the tax credits and reliefs page and add the credit.
Once you complete and submit the form a tax credit certificate will be issued to you and a separate Revenue payroll notification will be issued to your employer. Your employer will pay any refund due directly to you.
If you have no PAYE income, you can claim tax relief when you submit your Form 11 through the Revenue Online Service (ROS).
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The end of the calendar year is a good time to assess what tax reliefs and credits you are entitled too. In Ireland, if your only source of income is from employment, the tax liable is paid in full though the PAYE (pay as you earn) system. An employer is obliged to deduct income tax, PRSI and USC (universal social charge) from your salary under the PAYE system. An individual who is in receipt of only PAYE income doesn’t need to make an annual tax return to Revenue.
Your preliminary end of year statement shows whether you have paid the correct amount of income tax and USC for the year. This is based on your income and deductions as reported by your employer or pension provider.
Tax credits reduce the amount of tax you pay. The tax reliefs and credits depend on your personal circumstances and vary for different individuals. The best time to claim a tax refund is usually January or February after the end of the previous tax year (which runs from 1 January to 31 December just like the normal calendar year).
You can also claim a refund going back up to four years, so in 2023 you can claim a refund as far back as 2019. There are a number of tax credits and reliefs available that will reduce the amount of tax you pay, this could ultimately lead you to make financial savings.
Tax credits
Tax is calculated as a percentage of your income. Your tax credits are deducted from this to give the amount of tax that you have to pay.
It was announced in Budget 2023 that the following tax credits for 2023 will increase by €75 to €1,775:
Personal tax credit.Employee tax credit.Earned income tax credit.The home carer tax credit will increase by €100 to €1,700.
Medical expenses
Credit is available at 20% for non-recoverable medical expenses incurred. The tax relief is available to the person paying the fees.
There is a list of all qualifying health expenses on the Revenue website as certain items are not allowed. You can only claim for expenses that you have receipts for. You can claim relief on the last four years’ health expenses.
Tax relief is also available on fees paid for nursing homes. You can claim tax relief for nursing home fees under the general scheme for tax relief on medical expenses. If you paid nursing home fees, this relief is deducted from your total income.
The portion of your income which is taxable at your highest rate of tax is reduced meaning, the amount of relief is at 40% or 20% depending on the amount of tax you paid at either rate.
There also are a number of other tax reliefs carers and people with disabilities are entitled to.
Tuition fees
You may be entitled to claim tax relief on tuition fees paid for approved:
Undergraduate courses.Postgraduate courses.Information technology (IT) and foreign language courses.There is a full list on the Revenue website of courses and colleges approved for this relief. You can claim the relief as long as you have paid the actual fees, either on behalf of another person or for yourself. The maximum amount of fees that qualify for tax relief is €7,000 per person per course.
Full-time student: There is no tax relief on the first €3,000 spent on tuition fees (including the student contribution) for the 2022-2023 academic year.
Part-time student: There is no tax relief on the first €1,500 spent on tuition fees (including the Student Contribution) for the 2022-2023 academic year.
More than one student: If you are claiming for more than one student, you will get full tax relief on tuition fees (including the Student Contribution) for the second or subsequent students.
Example
Conor pays tuition fees of €5,000, the student contribution of €3,000 and student levy of €300 for a full-time course. He pays a total qualifying fee of €8,000. The student levy of €300 does not qualify for relief. The maximum he can claim for the course is €7,000
Conor’s calculation of relief:
Qualifying fee: €7,000
Deduct full-time disregard amount: €3,000
Amount relief applies to: €4,000
Tax relief received (20%): €800
Housing tax reliefs
It was announced in Budget 2023 that a new rent tax credit will be introduced. If you are paying for private rented accommodation, you can claim a tax credit of €500 a year for 2022 and subsequent years. This tax credit applies to each tenant rather than each tenancy. For rent you pay in 2022, you will be able to claim this credit early in 2023.
If you rent out a room or flat in your home, you are exempt from income tax on the amount that your tenant pays you for the rent and other services, up to €14,000 in a tax year. This is known as rent-a-room relief and it only applies to residential tenancies, not to short-term guest arrangements.
Employment-related reliefs
Apart from the employee tax credit of €1,775 that is deducted by your employer on behalf of revenue, there may be other employment related reliefs you qualify for. Some work expenses can be deducted from your income before it is assessed for tax.
If you are a member of an approved pension scheme, you can get income tax relief on your pension contributions to the scheme. The rate of tax relief is at the highest rate of income tax you pay, also known as the marginal rate.
There is a limit to the overall value of your pension fund that you can get tax relief on in a year, these increase as you get older.
The maximum amount of gross income taken into account to calculate the percentage is €115,000. If you are a professional or sports person who retires at an earlier age, you can get 30% tax relief on your net relevant earnings regardless of your age.
Annual limit
Age limited to
under 30 15%
30-39 20%
40-49 25%
50-54 30%
55-59 35%
60 or over 40%
Tax reliefs following a death:
The treatment of tax reliefs following a death depends on the civil status of the deceased person and on the way, they were taxed if married or in a civil partnership. Additional tax credits are available to widowed persons and surviving civil partners.
Income tax return
Once you know what tax reliefs/ credits you are entitled to you can claim this credit through revenue if you earned tax under the PAYE system.
The easiest way of doing this is to log into your account and request a statement of liability. You will then need to select “Maintenance Payments Made” in the tax credits and reliefs page and add the credit.
Once you complete and submit the form a tax credit certificate will be issued to you and a separate Revenue payroll notification will be issued to your employer. Your employer will pay any refund due directly to you.
If you have no PAYE income, you can claim tax relief when you submit your Form 11 through the Revenue Online Service (ROS).
Read more
Finance: The importance of succession planning and making a will
Smart savings for savvy junior consumers
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