Dáil Éireann Debate, Wednesday - 19 September 2012
66. Deputy Willie Penrose asked the Minister for Finance the tax position of a person who is aged 74 years and is a widow and in receipt of approximately €20,000 per year, with no other allowance other than the PAYE allowance an appropriate credit in respect thereof and has no other income other than the amount specified therein; and if he will make a statement on the matter. [39653/12]
Amharc ar fhreagraA widowed person in receipt of a gross income of €20,000 would be chargeable to both Income Tax and Universal Social Charge for the year 2012. These would be determined as follows:
Income Tax (PAYE) Liability:-
|
Income: |
€20,000 |
|
Tax payable 20,000 @ 20% = |
€4,000 |
|
Less: - |
- |
|
Personal Credit |
€2,190* |
|
PAYE Credit |
€1,650 |
|
Age Tax Credit |
€245 |
|
Total Credits |
€4085 |
|
Net Liability |
€Nil |
* Personal Credit in this instance refers to the Widowed Person or Surviving Civil Partner without qualifying children tax credit.
Universal Social Charge (USC) Liability (if none of the income is from Department of Social Protection):-
€10,036 @ 2% = €200.72
€9,964 @ 4% = €398.56
Net Liability = €599.28
Persons aged over 70 years have Universal Social Charge deducted at the rate of 4% in respect of any income in excess of €10,036. The higher rate of 7%, for income in excess of a ceiling of €16,016, is not applicable to persons over 70 years.
Income from the Department of Social Protection is not subject to the Universal Social Charge. If a person is in receipt of total income of €20,000 of which €11,500 is received from the Department of Social Protection, then the balance of €9,500 is not liable to USC as it is below the €10,036 threshold.
Any individual who wishes to have their liability checked for any of the 4 prior years of assessment should contact their tax district which will carry out the relevant reviews. There are other credits that an individual may be entitled to which are set out in leaflet IT1 and which is available on the Revenue website at http://www.revenue.ie/en/tax/it/leaflets/it1.html#section1.
