Some credits, such as the PAYE tax credit, are given automatically. Other you have to claim for, such as tuition fees, rent relief, as well as those outlined below.
I have set out 14 ways in which you may have paid too much tax last year and may now be entitled for a tax refund.
1. Rental tax credit
There is a tax credit that can be used to offset the cost of rent, however Revenue has tightened up the rules considerably, and the credit will be phased out by 2017.
To claim, you must have been in rental accommodation on December 7th, 2010. If you have only started renting since that date, you won’t be eligible. However, if you have been renting since before that date, and have never claimed the credit, you can back claim for the last 4 years.
2. Claiming Mortgage Interest Relief
Most people assume that when they took out a mortgage that the lender apples the mortgage interest relief to your mortgage. That is correct however the lender will only pay the relief to your mortgage after you have applied to Revenue for the relief to be granted. Tax relief is for mortgage interest on a home loan given to mortgage holders based on the interest paid on a qualifying mortgage on your home i.e. a new mortgage for a home, a top up loan used for the purposes of developing or improving your home, a separate home improvement loan, a re-mortgage or a consolidation of existing qualifying loans [i.e. loans used for the purchase, repair or improvement of your home], secured on the deeds of the home. It has been abolished since 2012 however it is still due on mortgages taken out prior to 31st December 2012 and will be phased out in 2017.
3. Joint Assessment after Marriage/Year of Marriage Review
If you got married or entered into a civil partnership anytime within the last four years but didn’t notify Revenue, you may find that you have overpaid tax. Once you’re married or are civil partners, you can share tax credits & cut off points and have more of your income taxed at the lower rate. Whether it will benefit you typically depends on how much you both earn. If one person earns less than €33,800 it will be of benefit.
If your circumstances change, such as one partner no longer working, it is possible to then readjust your tax credits.
A year of marriage review is available from the date of marriage to the tax year end (31/12) and you may also be due a partial refund, if your circumstances are similar to the example outlined above.
4. Taking Maternity Leave
Maternity benefit became taxable in July 2013. Once you return from maternity leave Revenue place you on a Week 1 basis which means that your income and tax paid before you went on maternity leave is not taken into consideration and therefore you more than likely have overpaid your tax in that or subsequent year.
5. Single Carer Credit
The Single Person Child Care Credit (SPCCC) is a tax credit that is available to a single person who is a parent of a child or who has custody of and maintains a child who is living with him or her. The credit is awarded to the primary carer of the child or can be reqluished to the secondary claimant if the primary carer is not using it. It is worth €1,650 per annum
6. Home Carer Credit
If you or your partner lost your job, or decided to take some time out of the workforce to care for children or an elderly relative, a tax credit can be given to the working spouse to help ease the financial burden. And the credit has just become more attractive. A change in Budget 2016 means that the Home Carers Tax credit can be claimed in circumstances where the stay-at-home partner, who is caring for a dependent person such as a child or elderly relative, doesn’t earn more than €7,200 in one year. Prior to 2016, the amount that could be earned was restricted to €5,080. And the credit has also been increased, from €810 to €1,000 in 2016.
Figures show that 81,000 taxpayers benefited from this relief in 2015, but it is estimated that far more people should be entitled to it.
7. Incapacitated Child Credit
The tax credit can be claimed where a claimant proves that he or she has living at any time during the tax year any child who is permanently incapacitated either physically or mentally from maintaining himself/herself. The relief due is an annual tax credit of €3,300 per annum.
8. Health Insurance
If you buy health insurance for yourself, you benefit from tax relief at a rate of 20 per cent on the cost of your premium, reducing the cost to you. So for example, a €1,000 annual payment to the VHI will cost you €800, which is the same as giving tax relief at the standard rate of tax (20 per cent).
If, however, your employer pays for private health insurance on your behalf, you will not have been allowed tax relief at source and will incur a benefit-in-kind charge on the cost of the premium, which means that you can still claim your medical insurance tax credit. Since 2013, you can only claim tax relief on medical insurance premiums on the first €1,000 per adult, and the first €500 per child.
9. Flat Rate Expenses
Did you know that if you’re an engineer, electrician, nurse, teacher, work in retail you can claim back an annual expense allowance to cover essentials such as uniforms and tools of your trade that are not normally covered by your employer?
Flat-rate expenses apply to a wide range of professions. In addition to those mentioned above, these includes doctors, clergymen and those working in the hotel industry.
If you’re a teacher, you are entitled to an annual allowance of €518, or €279 if you work part-time. If you’re a dentist, you can get an allowance of €376. Musicians in the RTÉ National Symphony and Concert Orchestras benefit from one of the most generous allowances, at €2,476.
10. Income Protection/Permanent Health Insurance
Many of us take out income protection policies for some protection in the event that we lose our income due to accident, injury or sickness. Unlike a critical illness policy, which pays out a lump-sum in the event of a major illness, tax relief is payable on monthly income protection premiums, provided that the policy is approved by the Revenue as a Permanent Health Benefit Scheme.
Relief is granted at your highest rate of tax, up to an annual limit of 10 per cent of total income, as long as you are paying the premiums yourself.
So, for example, a 30-year-old male civil engineer who is paying €56.51 a month for cover of €25,000 (50 per cent of income), should only be paying €33.34 a month, once tax relief is factored in.
11. Paying too much USC
The universal social charge is a scourge for many, but some may be paying too much of it. If, for example, you received a full medical card in recent years, you may be eligible for a lower rate of USC. But the only way of getting it is by notifying Revenue of your change in circumstances.
Once Revenue is aware of your medical card, it will issue a revised tax credit certificate to your employer. Any refund due will be automatically made by your employer.
You pay the USC if your gross income is more than €13,000 per year. (This limit was €4,004 in 2011, €10,036 from 2012 to 2014 and €12,012 in 2015). Once your income is over this limit, you pay the relevant rate of USC on all of your income. It is calculated on a weekly or monthly basis. If your income in any of the tax years was below the limit a refund of the USC is due.
USC does not apply to social welfare or similar payments.
12. Paying full price for your commuting costs
If you use the bus, Luas or rail services to get to work every day, you could significantly save on your costs by buying a taxsaver commuter ticket through your employer. This can help allay the increasing cost of transport.
Under the scheme, you are entitled to receive annual, monthly and part-yearly (Bus Éireann only) commuter tickets free of tax and PRSI as part of your salary package. The only caveat is that to claim tax relief, the ticket must be purchased through your employer. The savings are significant, especially given the increases in the overall tax burden due to the universal social charge.
For example, an annual Dublin Bus ticket will set you back €1,320. If you pay tax at the standard rate, however, you can save €389.40 by buying it through your employer, or €653.40 if you pay tax at the higher rate.
13. Pension/PRSA Contributions
If you are contributing to a personal pension or PRSA directly to the insurer (not via payroll) you will not have received the tax relief on the contributions. It is at your highest rate of tax up to an annual limit based on salary and age restrictions. For example a 30 year old earning €50k, can contribute up to 20% of their salary i.e.€10k per annum and receive tax relief of 40% i.e. €4,000 which has a net effect of costing you €6k to invest €10k into your pension. There is no USC or PRSI relief on pension contributions since 2010.
14. DIRT Reclaim
If you or your spouse recently turned 65 and are within certain income limits, you shouldn’t be paying Dirt at a rate of 41 per cent on any income earned on deposits. This means that you could be due a refund.
And it’s not just over-65s who don’t have to pay Dirt. First-time buyers can also claim back Dirt on savings for a deposit for their house. While not many have (figures for last year show just 74 claims were made), with some €74,880 refunded, it shows that the average refund was of the order of €1,000.
For any queries please contact Lorraine Cooke on 087 2608988 or firstname.lastname@example.org