Pension Contributions >> PRSI Refunds
Tags: PRSI Refunds, pension contributions , Tax refunds
If you are married and your spouse assists in running the business then you should ensure that they receive payment for doing so, and then they will also qualify for the contributory pension at age 66. If you are a sole trader they need to be treated as a partner in the business and pay PRSI under Class S.
For sole traders entering partnership with your spouse could have other tax implications which would need to be examined. However with careful planning this should not be a major issue. In fact it will save you tax under the individualization rules. Your spouse at age 66 should have full entitlement to a contributory pension at no extra cost to you. There will be no extra PRSI cost as the same amount of income will be liable for PRSI regardless of whether you are a sole trader or a partnership. The same position can be achieved if you carry on business through a limited company. However your spouse will be treated as a normal employee for PRSI purposes. Your spouse will qualify for the contributory pension at no extra cost.
PRSI Refunds for Years up to 2010
Employees who are not in a company scheme but make their own pension contributions directly to an insurance company may be entitled to a refund of PRSI as well as income tax relief on the pension contributions. The relief has been abolished from 2011 onwards. This PRSI refund claim is often overlooked as it must be claimed separately through the office of the Collector General in Limerick and not through your normal tax return.
A simple claim form Application for PRSI refund in respect of Pension Contributions must be completed and sent to the Collectors General office in Limerick. This form can be downloaded from the Revenue website.
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