The Finance Bill 2015 proposes to introduce a new tax credit known as the Earned Income Tax Credit which will, subject to enactment of the Bill, be available for the tax year 2016 and later years.
The tax credit, which is capped at €550, is available in respect of an individual's earned income other than earned income that already qualifies for the Employee (PAYE) Tax Credit. As such, farm self-employment income which arises from a trade qualifies as earned income for the purposes of the new Earned Income Tax Credit.
Where an individual has income that qualifies for the Earned Income Tax Credit and the Employee (PAYE) Tax Credit, the aggregate value of the tax credits is limited to €1,650, which is the maximum amount available for the Employee (PAYE) Tax Credit.
Similarly, an employee with two separate employments is limited to a maximum Employee (PAYE) Tax Credit of €1,650.