By Tracey Glacken, Glacken Accountants
As the filing deadline for Income Tax 2011 draws closer many taxpayers are unaware of the tax credits that can be claimed and each year millions of Euro goes unclaimed. The following is a brief summary of tax credits available. This list is not exhaustive and more information can be obtained from www.revenue.ie. These credits can be claimed regardless of whether you are self employed or a PAYE employee. Receipts do not need to be submitted to the Revenue but should be held for sixyears.
1. Health Expenses
You may claim tax relief at the standard rate of tax (20%) for certain medical expenses. Most medical expenses, with some exceptions e.g. routine dental and ophthalmic care, qualify for relief. You cannot claim for expenses that have previously been refunded e.g. VHI, BUPA or under the Drugs Payment Scheme.
2. Home Carer Tax Credit
Where one person works in the home caring for one or more dependent persons, e.g. child, person over 65 a tax credit of €810 (maximum) can be claimed. The home carer’s income cannot be in excess of €5,080. A reduced tax credit applies where the person’s income is between €5,080 and €6,700 in the years 2011 and 2012.
3. Service Charges
This relief is being abolished for 2012. In 2011 the relief can be claimed at 20% and is relevant to the amount paid in 2010. In 2011 the maximum tax relief granted was €400 at 20%. This relief applies to payments made for domestic water, refuse and sewage charges.
4. Permanent Health Benefit
This benefit is also known as ‘Income Protection’ and qualifies for relief at the tax payers highest tax rate (41%).
5. Rent Relief for Private Accommodation
A person renting private accommodation can claim between €1,600 and €6,400 (maximum) depending on age and marital circumstances in 2011. This relief is allowed at the 20% rate of tax.
6. Tuition Fees
Tax relief at the standard rate of tax in the tax years 2011 and 2012 is available for certain tuition fees. The maximum limit on such qualifying fees for the academic years 2011/2012 and subsequent years is €7,000 per individual per course.
Relief is not available for certain items including registration or examination fees or where part of the fees is met directly by grants or scholarships. The college and course must be on the Revenue’s approved list before a claim is made.
7. Revenue Job Assist
Additional tax relief at the individual’s highest rate of tax, in 2011 and 2012, is available for people who have been unemployed for one year or more and who take up a qualifying job. This relief is also available for persons who have been in receipt of Disability Allowance, Blind Person’s Pension or Invalidity Pension for 12 months or more, Illness Benefit for three years or more or released after 12 months or more in prison.
Amounts contributed to a pension can be deducted from gross income before that income becomes liable to tax, subject to certain limits. E.g. a person aged 40-49 can claim 25% of their remuneration/net relevant earnings against pension contributions. Relief in respect of PRSI and the health levy may also be available.
Claims for previous years
Claims can be made for up to four previous tax years, e.g. by 31/12/12 you must have claimed for 2008.