Mary Butler
Ceist:195. Deputy Mary Butler asked the Minister for Finance the reason persons' (details supplied) tax credits were reduced from €36,000 to €27,500; and if he will make a statement on the matter. [14124/18]
Amharc ar fhreagraTuesday, 27 March 2018
Ceisteanna (195)
Freagraí scríofa
I am advised by Revenue that in the absence of specific information on the taxpayers concerned it is not possible to comment on the case mentioned. However, if the taxpayers wish to contact their local Revenue office then officials would be happy to assist them.
In general the income tax treatment of persons aged 65 and over is as follows:
- An additional age tax credit is available. For single individuals the credit is €245 per year and for a couple who are married or in a civil partnership the credit is €490.
- In addition to the age tax credit, individuals over the age of 65 are exempt from any tax where their income is below a threshold of €18,000 for a single individual or €36,000 for a jointly assessed couple. If the couple have children that are under 18, over 18 and in full-time education or incapacitated, the exemption limits are increased by €575 per child for the first two children and €830 per child for any additional children. However, this exemption threshold is reduced by the amount of any income that is not subject to PAYE. This reduction includes any pension payments made by the Department of Employment Affairs and Social Protection. This is to ensure that the taxpayer pays the correct amount of tax based on their total income consisting of both PAYE and non-PAYE income.
- Where a taxpayer’s income exceeds the relevant threshold, tax is calculated in the normal manner on the full amount of income. However, if the taxpayer’s income is above the thresholds by a small amount, a further relief, known as “marginal relief” is available. Marginal relief operates by reducing the individual or couple’s tax liability for a year of assessment to 40% of the amount by which their income exceeds the threshold. Where the application of marginal relief gives a more favourable tax outcome than the standard tax calculation, Revenue will apply this option.
Further information on the age tax credit and related exemptions can be found on the Revenue website at:
https://www.revenue.ie/en/life-events-and-personal-circumstances/older-persons/tax-credits-for-older-persons.aspx .