Income Tax

Tax Toolkit / Income Tax

Welcome to the Taxes & Duties section. This section will help you to look for information on a specific tax or duty (listed alphabetically) and provides relevant leaflets, guides and forms within each tax or duty type. Some of this and additional material are also available in the Personal Tax and Business & Self Assessment sections.

Tax Rates and Tax Bands

The tax rates and bands remain unchanged: Personal Circumstances 2015 € 2016 €
Single or Widowed or Surviving Civil Partner, without qualifying child €33,800 @ 20%
Balance @ 40%
€33,800 @ 20%
Balance @ 40%
Single or Widowed or Surviving Civil Partner, qualifying for Single Person Child Carer Credit €37,800 @ 20%
Balance @ 40%
€37,800 @ 20%
Balance @ 40%
Married or in a Civil Partnership, one Spouse or Civil Partner with Income €42,800 @ 20%
Balance @ 40%
€42,800 @ 20%
Balance @ 40%
Married or in a Civil Partnership, both Spouses or Civil Partners with Income €42,800 @ 20%
with increase of 24,800 max.
Balance @ 40%
€42,800 @ 20%
with increase of 24,800 max.
Balance @ 40%

Earned Income Tax Credit


A new Earned Income Tax Credit is being introduced for 2016. The tax credit is calculated at 20% of an individual’s earned income (excluding earned income that is taken into account for the PAYE Tax Credit) subject to a maximum of €550.

Where an individual has earned income that qualifies for Earned Income Tax Credit and PAYE Tax Credit, the combined tax credits cannot exceed €1,650.

Home Carer Tax Credit


If the Home Carer has income in his or her own right, the tax credit is reduced by one-half of the amount of income that exceeds €7,200 (€5,080 in 2015). Additionally, where Home Carer Tax Credit is claimed, the increase in the standard rate income tax band that is available to couples in a marriage or civil partnership who are jointly assessed to tax does not apply.

MAIN PERSONAL TAX CREDITS

Personal Tax Credit Test 2015 € 2016 €
Single Person €1,650 €1,650
Married or in a Civil Partnership €3,300 €3,300
PAYE Tax Credit €1,650 €1,650
Earned Income Tax Credit Max  – €550
Widowed Person or Surviving Civil Partner (without qualifying child) €2,190 €2,190
Single Person Child Carer Tax Credit €1,650 €1,650
Incapacitated Child Credit Max €3,300 €3,300
Blind Tax Credit    
Single Person €1,650 €1,650
Married or in a Civil Partnership – One Spouse or Civil Partner Blind €1,650 €1,650
Married or in a Civil Partnership – Both Spouses or Civil Partners Blind €3,300 €3,300
Widowed Parent Bereaved in 2015 €3,600
Widowed Parent Bereaved in 2014 €3,600 €3,150
Widowed Parent Bereaved in 2013 €3,150 €2,700
Widowed Parent Bereaved in 2012 €2,700 €2,250
Widowed Parent Bereaved in 2011 €2,250 €1,800
Widowed Parent Bereaved in 2010 €1,800
Age Tax Credit    
Single or Widowed or Surviving Civil Partner €245 €245
Married or in a Civil Partnership €490 €490
   
Dependent Relative €70 €70
Home Carer Tax Credit €810 €1,000

INCOME TAX RATES

Personal Tax Credit 2014 € 2015 €


Single or Widowed or Surviving civil
Partner, without Dependant Children
32,800 @
20%
Balance @
41%
33,800 @
20%
Balance @
40%


Single or Widowed or Surviving Civil
Partner, qualifying for Single Person
Child Carer Credit
36,600 @
20%
Balance @
41%
37,800 @
20%
Balance @
40%


Married or in a Civil Partnership,
one Spouse or Civil Partner with Income
41,800 @
20%
Balance @
41%
42,800 @
20%
Balance @
40%


Married or in a Civil Partnership,
both Spouses or Civil Partners with
Income
41,800 @
20%
increase of
23,800
max.
Balance @
41%
42,800 @
20%
increase of
24,800
max.
Balance @
40%
Rent-a-room scheme 10,000 12,000


The threshold for exempt income under the rent-a-room
scheme, which applies to sums arising where a person
rents out a room or rooms in his or her principal private
residance, is being increased from €10,000 to €12,000 per
annum.
   
Marginal Rate Reliefs    
Relief (Allowed at the taxpayer’s top rate of tax) 2014€ MAX 2015€ MAX

Employing a carer
50,000 50,000

MORTAGE INTEREST – TAX RELIEF


Interest paid on qualifying home loans taken out on or after 1 January 2004 and on or before 31 December 2012 will (subject to the exception below) qualify for tax relief up to the end of 2017 at the following general rates and thresholds.

First-Time Buyers – The tax relief on interest paid on qualifying home loans is 25% for years 1 and 2; 22.5% for years 3, 4 & 5 and 20% for years 6 and 7. The upper thresholds in respect of the amount of interest paid qualifying for tax relief are €20,000 for individuals who are married, in a civil partnership or widowed and €10,000 for individuals who are unmarried and not in a civil partnership. After year 7, the rates and thresholds for relief are as for non-first time buyers.

Non-first time buyers – The tax relief on interest paid on qualifying home loans is 15%. The upper thresholds in respect of the amount of interest paid qualifying for tax relief are €6,000 for individuals who are married, in a civil partnership or widowed and €3,000 for individuals who are unmarried and not in a civil partnership.

Exception – However, notwithstanding the rates of tax relief mentioned above, for individuals who purchased their first principal private residence on or after 1 January 2004 and on or before 31 December 2008, the rate of tax relief on the interest paid on the loan to purchase that property will, for the tax years 2012 to 2017, be 30%.

The relief will be abolished completely by the end of 2017.

RENT TAX RELIEF

Relief for rent credit will be withdrawn on a phased basis over the next 6 years by reducing the amount of rent that can be relieved at the standard rate of income tax as indicated in the following table.
Tax Year Single Under 55 Single Over 55 Widowed/ Married under 55 Widowed/ Married over 55
2010 2,000 4,000 4,000 8,000
2011 1,600 3,200 3,200 6,400
2012 1,200 2,400 2,400 4,800
2013 1,000 2,000 2,000 3,600
2014 800 1,600 1,600 3,200
2015 600 1,200 1,200 2,400
2016 400 800 800 1,600
2017 200 400 400 800
2018 0 0 0 0
Claimants who were not renting at 7 December 2010 and who subsequently enter into a rental agreement will not be able to claim relief.

EXEMPTION LIMITS

The exemption limits for persons aged 65 years and over remain unchanged: Personal Circumstances 2015 € 2016 €

Single or Widowed or a Surviving Civil Partner, 65 years of age & over
18,000 18,000

Married or in a Civil Partnership, 65 years of age & over
36,000 36,000
  • * The above exemption limits are increased by €575 for each of the first two dependent children and by €830 for the third and subsequent children.
  • * Marginal Relief may apply.

Mortgage Interest Relief


Mortgage interest relief is a tax relief based on the amount of qualifying mortgage interest that you pay in a given tax year for your principal private residence (your home). A tax year means the period from 1 January to 31 December.

Mortgages taken out after 31 December 2012 do not qualify for mortgage interest relief. Mortgage interest relief is administered via Tax Relief at Source (TRS). This means that your mortgage lender gives you the benefit of tax relief on the amount of mortgage interest paid. The lender does this by reducing your mortgage repayment by the amount of tax relief you are entitled to in each tax year. Any amendments to this tax relief – for example, if there is a change in interest rates – are made automatically by your lender.

You do not have to be earning a taxable income to qualify for mortgage interest relief.

Normally, you do not claim mortgage interest relief in an annual tax return because it is given directly to you by your mortgage lender. Tax relief can still be claimed from your Revenue office for interest paid on non-secured loans used for qualifying purposes.

Mortgage interest relief will be abolished entirely after 31 December 2017.

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