Dáil Éireann Debate, Tuesday - 15 June 2021
351. Deputy Emer Higgins asked the Minister for Finance if a parent who is fully financially supporting their child who resides outside of the EU can claim tax relief on their income; and if he will make a statement on the matter. [31096/21]
View answerI am advised by Revenue that while there is no specific child tax relief available to parents, there are some reliefs that may apply to parents supporting children who reside outside of the EU. Each of these reliefs is subject to certain conditions.
Revenue advises that parents supporting children outside the EU may be eligible for health expenses relief in the form of income tax relief for expenditure on certain health expenses for themselves and their dependents, including visits to the doctor, medicines, nursing care in the patient’s home (in certain circumstances), nursing home fees, expenditure in respect of children with life threatening illnesses, kidney patients’ expenses, mileage for individuals who need to travel for treatment and certain medical appliances. More information on tax relief for health expenses is available here: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-12.pdf
Revenue also advises that parents in the circumstances outlined may also be eligible under section 473A Taxes Consolidation Act 1997 which provides for income tax relief in respect of qualifying tuition fees paid by an individual for a postgraduate third level education course, subject to the terms and conditions set out in that section. The relief is granted at the standard rate of income tax (currently 20%), where an individual pays qualifying fees for an approved course whether on his or her own behalf or on behalf of another individual. Claimants who pay tuition fees in instalments can claim tax relief either in the tax year when the academic year started or the tax year when the instalment is paid.
“Qualifying fees” mean tuition fees in respect of an approved course at an approved college. Tuition fees that are, or will be, met directly or indirectly by grant, scholarship, employer contribution or other means are deducted in arriving at the net qualifying fees. A claim for relief may be made in respect of a number of students. It should be noted that any claim for relief must be submitted within the 4-year time limit which applies to claiming tax reliefs. The maximum amount of fees that can qualify for the relief is €7,000 per course per academic year. A disregard amount per claim is applied which is currently €3,000 in the case of a full-time course(s) and €1,500 for a part time course(s). One disregard amount applies to each claim. Full details of the relief, including the terms and conditions that apply, are set out on the Revenue website at www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/education/tuition-fees-paid-for-third-level-education/index.aspx .
Further reliefs may arise where eligibility for specific relief(s) from income tax depends on the circumstances of the individual claimant.
Single Person Child Carer Tax Credit
The single person child carer tax credit is available to a ‘single person’ who has a qualifying child residing with him or her for the whole or greater part of the year of assessment.
A single person, for the purposes of this tax credit, is an individual who is not jointly assessed for tax as a married person or civil partner, living with his or her spouse or civil partner, or cohabiting with a partner.
A qualifying child includes:
- a child who was born in the tax year;
- a child who was under the age of 18 at the start of the tax year;
- an individual who is over the age of 18 at the start of the tax year if he or she is either in full-time education or permanently incapacitated by reason of mental or physical infirmity from maintaining themselves; or
- a permanently incapacitated individual who is over the age of 21, if he or she became permanently incapacitated before reaching the age of 21 or while in full-time education.
As noted above, the qualifying child must be resident with the claimant for the whole or greater part of the year of assessment. The greater part of the year of assessment is taken to be a period greater than six months.
However, where a child is in receipt of full-time education and is required to live away from home during term time, the child may be deemed to be resident with the claimant for the purposes of the credit. Full-time education includes all primary degrees and diplomas undertaken in public and private educational establishments where the course is for one year or more. It also includes programmes of training for any trade or profession (apprenticeships) where the child is required to devote the whole of his or her time to the training for a period of not less than 2 years.
Widowed Parent Tax Credit
The widowed parent tax credit may be available to a surviving spouse or civil partner in each of the five years following the year of bereavement.
The credit will be available where the surviving spouse or civil parent has not married, remarried, entered into a civil partnership or entered into a cohabiting relationship and has a qualifying child residing with him or her for the whole or part of the year.
A qualifying child, for the purposes of the widowed parent tax credit, will be determined on the same basis as for the single person child carer tax credit.
Finally, it is not clear from the information provided whether the Irish resident individual has entered a maintenance agreement with a former spouse or civil partner. Maintenance payments which are specifically for the benefit of a child or children may be payable on foot of a maintenance agreement or an order of the Court. Such payments are ignored for income tax purposes and the paying party cannot claim an income tax deduction for these payments. The receiving party will not pay income tax, universal social charge or PRSI on payments received on behalf of any child or children.
