This credit is available for all married couples/ civil partnerships (referred to in future collectively as qualifying couples) living together that are not continuing to pay their tax as single persons. Qualifying couples have different options as to how they should pay their tax. There are 3 different options for known as Joint Assessment, Separate Assessment and Single Assessment.
The majority of couples pay their tax on this basis. One spouse/partner is responsible for completion and submission of tax forms to the Revenue and for paying any tax owed to the Revenue. All tax credits are normally given to this spouse/partner and if the other spouse/partner is working they receive basic tax credits only against their earnings e.g. PAYE allowance for PAYE earners.
This is not to be confused with separated couples. A qualifying couple can elect to be taxed as single people during the tax year subject to re-examination after the end of the tax year to see if they would pay less tax under the Joint Assessment basis. If so they will get a refund.
This option can lead to cash flow disadvantages between spouses if there is a substantial difference in their incomes. However, provided you claim the re-examination of your joint tax position after the end of the tax year any tax overpaid during the tax year will be refunded to you.
If you wish to use this separate assessment method you have to apply for it to your tax office before the 1st of April during the relevant tax year.
As the name implies this option means each spouse/partner is taxed as though they remained single. Your tax affairs are never joined together. This can result in more tax being paid than under the Joint Basis and Separate Assessment Basis.
This option is not chosen very often by qualifying couples because unlike the Separate Assessment Basis there is no option for re-examining your tax affairs on a Joint Basis after the end of the tax year.
If you wish to use this single assessment method you have to apply for it to your tax office before the end of the relevant tax year.