Couples under the age of 65 are liable to tax under the normal system of rate bands and tax credits, and their own personal circumstances will determine their tax-free income thresholds for the year(s) in question. Further information is available on the Revenue website at https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/tax-relief-charts/index.aspx.
A person aged 65 and over is fully exempt from income tax where his or her total income from all sources is less than the relevant exemption limit. For 2019, the exemption limits are €36,000 for a married couple or civil partners and €18,000 for a single individual. Only one member of the couple is required to be 65 or over at any time in the year for the increased exemption limit of €36,000 to apply. Where a couple have dependent children, the exemption limit is increased by €575 per child for the first 2 children and €830 for each child thereafter. Where an individual exceeds the exemption limit, he or she is liable to tax based on the normal system of tax rates, rate bands and tax credits, subject to the application of marginal relief where relevant. Further information on the application of the exemption limit and associated marginal relief is available in Revenue’s Tax and Duty Manual on the Revenue website at https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-07/07-01-18.pdf.
Other supports for the over 65s may apply depending on personal circumstances, including the Age Tax Credit which is available to all individuals aged 65 or over who do not qualify for an exemption from income tax. This credit is currently set at €245 for single individuals or €490 for a married couple or civil partners. As with the exemption limits mentioned above, only one member of the couple must be 65 or over at any time in the year to be eligible for the increased Age Tax Credit of €490. Further information on the income tax credits and reliefs for individuals over 65 is available in Revenue’s Tax and Duty Manual on the Revenue website at https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-26.pdf.
In relation to the PAYE tax credit (employee tax credit), this credit of €1,650 is available where an individual is in receipt of income that is taxable under the PAYE system. In addition to wages, this includes benefits-in-kind, occupational pensions and payments received from the Department of Employment Affairs and Social Protection (DEASP). The credit is also available to Irish resident individuals who are in receipt of a social security pension received from another EU Member State or wages from abroad, where tax was deducted under a PAYE type system. Further information is available on the Revenue website at https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/income-and-employment/employee-tax-credit/index.aspx.