Written Answers. - Tax Code.

Bernard J. Durkan

Question:

113 Mr. Durkan asked the Minister for Finance the current tax allowance and tax credit position in regard to two adults cohabiting plus two children but with only one adult a wage earner; and if he will make a statement on the matter. [19502/03]

Two persons who cohabit, not being married to each other, are taxed as single persons and each partner is entitled to the tax credits and standard rate tax band appropriate to single persons.

Where an unmarried cohabiting couple has two children, and only one partner is a wage earner, the partner who is in employment is entitled to the single personal tax credit of €1,520 and a PAYE tax credit of €800. His or her income is liable to tax at the rate of 20% on the first €28,000 and 42% on the balance.
The married personal tax credit is €3,040, the home carer tax credit is a maximum of €770 and the tax rate band for a married couple with one spouse in employment is 20% on the first €37,000 and 42% on the balance. This can only be claimed by a taxpayer who is married and if the couple has elected to be jointly assessed. The married and home carer tax credits and the married tax rate band cannot be claimed by a taxpayer who is not married to his or her partner.
In general a taxpayer who is a single parent may claim the one-parent family tax credit for a dependent child or children. The credit cannot be claimed where the taxpayer and his or her partner are living together as man and wife.