Tax Credits & Reliefs >> Tax Credits - Home CarersTags: children, one income couples, extra tax credits
This tax credit was introduced to provide a measure of compensation to married couples where one spouse remains at home to look after family members in view of the increased 20% tax rate band for dual income couples.
The tax credit for the years 2011, 2012 and 2013 is €810. This tax credit must be claimed from the Revenue. In practice people often overlook this claim so it is worth checking to ensure that you are being allowed the benefit.
Where the home carer has other income a calculation needs to be done to see which is more beneficial i.e. the €810 tax credit or the increased 20% tax rate band. If the home carers income is less than €5,080 then you are entitled to the full €810 tax credit and the home carers income will be taxed at the 41%.
A reduced tax credit applies where the income is between €5,080 and €6,620. When the income exceeds this amount you are not allowed the tax credit of €810. Even where the home carers income is below the limit of €5,080 it may be more beneficial to forego this tax credit and avail of the extra 20% rate band for the home carers income. Our calculator automatically works out which is the best option for you to choose.
The spouse (the ‘home carer’) who works in the home must be looking after one or more dependent persons, i.e., a child for whom they are entitled to Social Welfare child benefit, a person aged 65 or over, or a person who is permanently incapacitated by reason of mental or physical infirmity and the qualifying person normally resides with the couple for the year.
The tax credit is not available to married couples that are taxed as single persons.