IT1 - Tax Credits, Reliefs and Rates for the Tax Years 2011 and 2012

Personal Tax Credits

The following chart gives details of the main personal tax credits for the tax years 2011 and 2012

Details of personal tax credits for 2011/2012
NB: Civil Partnership changes apply from 1 January 2011 only
Personal Circumstances Tax Year 2011 Tax Year 2012
Single Person €1,650 €1,650
Married Person or Civil Partner Tax Credit €3,300 €3,300
Widowed Person or Surviving Civil Partner qualifying for One Parent Family Tax Credit €1,650 €1,650
Widowed Person or Surviving Civil Partner without dependent children €2,190 €2,190
Widowed Person or Surviving Civil Partner in year of bereavement €3,300 €3,300
One-Parent Family, Widowed or Surviving Civil Partner , Deserted, Separated or Dissolved Civil Partnership, Divorced or Single (with qualifying dependent children, see note 1) €1,650 €1,650
Widowed Person or Surviving Civil Partner with qualifying child 2011 --- €3,600
Bereaved in 2010 €3,600 €3,150
Bereaved in 2009 €3,150 €2,700
Bereaved in 2008 €2,700 €2,250
Bereaved in 2007 €2,250 €1,800
Bereaved in 2006 €1,800 ---
Home Carer (max.) €810 €810
PAYE Tax Credit €1,650 €1,650
Age Tax Credit if Single or Widowed or Surviving Civil Partner €245 €245
Age Tax Credit if Married or In a Civil Partnership €490 €490
Incapacitated Child €3,300 €3,300
Dependent Relative ( See note 1) €70 €70
Blind Tax Credit - Single €1,650* €1,650*
Blind Tax Credit - One Spouse or Civil Partner Blind €1,650* €1,650*
Blind Tax Credit - Both Spouses or Civil Partners Blind €3,300* €3,300*
Incapacitated Person - Allowance for Employing a Carer €50,000**max €50,000**max

* Relief in respect of the cost of maintaining a guide dog (max €825) may be claimed under the heading of Health Expenses.

** Relief for Employing a Carer (2011 and 2012) is allowable at the individual's highest rate of tax, i.e. 20% or 41%.

Note 1- In the case of Dependent Relative Tax Credit, if the relative's income exceeds the relevant limit of €13,837 in the years 2011 and 2012

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Exemption Limits

Exemption limits for Single or Widowed or Surviving Civil Partner, Couples in a Marriage or Civil Partnership and additional amount(s) for qualifying children in 2011 and 2012
NB: Civil Partnership changes apply from 1 January 2011 only
Personal Circumstances Tax Year 2011 Tax Year 2012
Single, Widowed or Surviving Civil Partner 65 years of age or over €18,000 €18,000
Married or in a Civil Partnership 65 years of age or over €36,000 €36,000
Single, Widowed or a Surviving Civil Partner, Married or In a Civil Partnership 65 years of age or over
Additional for 1st and 2nd qualifying child		 €575 €575
Single or Widowed or a Surviving Civil Partner, Married or In a Civil Partnership 65 years of age or over
Additional for each subsequent qualifying child 		€830 €830
Marginal Relief Tax Rate 40%* 40%*

*The Marginal Relief Tax Rate only applies to persons 65 years of age or over.

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Tax Rates and Tax Bands

Tax rates and bands applicable to your personal circumstance in tax year 2011 and tax year 2012
NB: Civil Partnership changes apply from 1 January 2011 only
Personal Circumstances Tax Year 2011 Tax Year 2012
Single, Widowed or Surviving Civil Partner without dependent children €32,800 @ 20%, Balance @ 41% €32,800 @ 20%, Balance @ 41%
Single, Widowed or Surviving Civil Partner qualifying for One Parent Family Tax Credit €36,800 @ 20%, Balance @ 41% €36,800 @ 20%, Balance @ 41%
Married or In a Civil Partnership - one Spouse or Civil Partner with income €41,800 @ 20%, Balance @ 41% €41,800 @ 20%, Balance @ 41%
Married or In a Civil Partnership - both Spouses or Civil Partners with income €41,800 @ 20% (with an increase of €23,800 max), Balance @ 41% €41,800 @ 20% (with an increase of €23,800 max), Balance @ 41%

Note: The increase in the standard rate tax band is restricted to the lower of €23,800 in years 2011 and in 2012 or the amount of the income of the Spouse or Civil Partner with the lower income. The increase is not transferable between Spouses or Civil Partners.

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Rent-a-Room Relief

Where a room (or rooms) in a person’s sole or main residence is (are) let as residential accommodation, gross annual rental income, together with any sums received for the provision of meals or other services supplied in connection with the letting, may be exempt from income tax where the aggregate amount received in the year of assessment does not exceed the annual limit ( €10,000 for 2010 & 2011). Relief in respect of mortgage interest relief is not affected. The relevant Capital Gains Tax/Stamp Duty provisions are also not affected. For more information see Leaflet IT 70 - A Revenue Guide to Rental Income.

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Childcare Services

Childcare Services relief is a scheme of tax relief for income arising from the provision of certain childcare services. When the gross annual income from the provision of childcare services does not exceed €15,000 in 2010 or 2011 the income is exempt from tax. The childcare service must be provided in the carer's home, not the children's home and no more than 3 children may be cared for at any time.

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Rent Relief for Private Rented Accommodation

Relief is due at the standard rate of tax (20%) in the tax years 2011 and 2012 subject to the following upper limits:
NB: Civil Partnership changes apply from 1 January 2011 only
Personal Circumstances Tax Year 2011 Tax Year 2012
Single Under 55 max. €1,600 €1,200
Single Over 55 max. €3,200 €2,400
Widowed or a Surviving Civil Partner, Married or in a Civil Partnership under 55 max. €3,200 €2,400
Widowed or a Surviving Civil Partner, Married or In a Civil Partnership over 55 max. €6,400 €4,800

Relief can be claimed by completing pdfForm Rent 1 - Claim for Rent Relief on Private Rented Accommodation (PDF, 266KB)

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Tax Relief for Loan Interest (Secured and Unsecured)

Tax Relief at Source (TRS) on Secured loans

From 1 January 2002, tax relief for home mortgage interest is no longer given through the tax system but is instead granted at source. This means that your mortgage lender gives you the benefit of the tax relief element on the mortgage interest on behalf of the Revenue Commissioners. Tax relief is granted on the amount of the interest paid, subject to the overall limits. For more information see leaflet: Tax Relief at Source (TRS) for Mortgage Interest Relief.

Your mortgage repayment is reduced by the amount of the tax relief. Your lender in turn claims this amount from Revenue. Any future adjustments in the tax relief (for example, arising from changes in interest rates) will be made automatically by the lender on behalf of Revenue. It is not necessary to claim mortgage interest relief in the annual tax return, and it no longer appears on your Tax Credit Certificate. Borrowers who are taking out new mortgages or who wish to claim for relief due for previous years must apply online at www.revenue.ie.

Unsecured Home Loans

Relief for interest payments made on unsecured Home Loans used for qualifying purposes, i.e. repair or improvement of your sole or main residence can be claimed by review at the end of the tax year.

If, however, you are paying interest on a qualifying private residence mortgage in excess of the ceiling for relief, listed below, and you are receiving Tax Relief at Source on this interest then there will be no additional relief due in respect of a qualifying unsecured home loan.

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Tax Relief at Source - Mortgage Interest 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%.

Mortgages taken out prior to 1 January 2004 are no longer eligible for mortgage interest relief. However, top up loans/equity release loans taken out since 1 January 2004 on these pre-2004 loans may be eligible for mortgage interest relief, provided they adhere to eligibility criteria as listed above.

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

For more information see leaflet: Tax Relief at Source (TRS) for Mortgage Interest Relief.

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Medical Insurance Premiums

Tax Relief at Source (TRS)

Tax relief for medical insurance premiums paid to authorised insurers is granted at source (TRS). Subscribers will pay a reduced premium (80% of the gross amount) to the authorised medical insurer. This reduction is the same as giving tax relief at the standard rate of tax (20%).

Employees whose medical insurance premiums are paid on their behalf, by their employer, as a Benefit-in-Kind, will not have been allowed tax relief at source. To claim the relief due it will be necessary to notify your local Revenue Office with the relevant details or by completing your annual tax return.

The Age-Related Tax Credit (ARTC) was introduced in 2009 and applies to medical insurance premiums paid to an authorised insurer. The amount of the credit depends on the age of the insured person on the date the contract was entered into or renewed. For more information see Leaflet: IT 5 - Medical Insurance Relief

Revenue Job Assist

Additional tax relief at the individual’s highest rate of tax, i.e. 20% or 41% in 2011 and 2012, is available for people who have been unemployed for one year or more and who take up a qualifying job. From 1 January 2010, incidental days of employment, i.e. up to 15 days of incidental employment in the 12 months prior to commencements of the employment, will not be counted. Relief in the first year of employment is €3,810 plus €1,270 for each child, reducing to two-thirds of that amount in Year 2 and one-third in Year 3. This relief is also available for persons who have been in receipt of either Disability Allowance, Blind Person’s Pension or Invalidity Pension for 12 months or more, Illness Benefit for 3 years or more or released after 12 months or more in prison. For more information see Leaflet IT 58 - Job Assist Information for Employees.

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Revenue Approved Permanent Health Benefit Schemes

Where an employer deducts the contributions from gross pay the tax relief is given at source. Therefore no further action is necessary to claim relief.

Where an employer does not deduct the contributions from gross pay relief can be claimed, by notifying your local Revenue office of the relevant details by phone, email or in person ( See Further Information) or by completing your annual tax return.

Tax Relief on Service Charges

The relief is being abolished for tax year 2012 and subsequent years. In 2011, a maximum of €400 tax relief was granted (at the 20% rate) for service charges paid in the year 2010.

Relief for Service Charges paid in the years 2010-2011
Relief at 20% tax rate Allowed in the year For service charges paid in the year
€400 2011 2010
Nil 2012 2011

Home Carer's Tax Credit

A tax credit at the standard rate of tax (20%) in the tax years 2011 and 2012 is available for Married Couples or Civil Partners where:

  • One Spouse or Civil Partner (the 'home carer') works in the home caring for one or more dependent persons, i.e. a child for whom they are entitled to child benefit from the Department of Social Protection, a person aged 65 or over, or a person who is permanently incapacitated by reason of mental or physical infirmity and the qualifying person normally resides with the couple for the year.
  • The home carer’s income is not in excess of €5,080. A reduced tax credit applies where the income is between €5,080 and €6,700 in the years 2011 and 2012.

The tax credit is not available to Married Couples or Civil Partners that are taxed as single persons. Neither is the tax credit available to Married Couples or Civil Partners with combined incomes over €41,800 in the tax years 2011 and 2012 and who claim the increased standard rate tax band for dual income Couples. For more information and also to claim the relief due complete the application form in Leaflet IT 66 - Home Carer's Tax Credit and send it to your local Revenue office. Alternatively, you can telephone your Regional LoCall number (see Further Information) with details of your claim.

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Trade Union Subscriptions

Note: Tax relief for Trade Union subscriptions has been abolished with effect from 1 January 2011.

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Health/Medical Expenses Relief

You may claim tax relief on a Form MED 1, at the standard rate of tax (20%), from 1 January 2009 (with the exception of nursing home expenses for which tax relief is still available at your highest rate of tax) for certain medical expenses incurred by you, on your own behalf or on behalf of another person. Most medical expenses, with some exceptions e.g. routine dental and ophthalmic care, qualify for relief.

You cannot claim relief for any expenditure which has been or will be reimbursed, e.g. by Hibernian Aviva Health, Quinn-healthcare, VHI, a Health Authority, or where a compensation payment is made or will be made.

For more information see Leaflet IT 6 - Health / Medical Expenses Relief, Form pdfMED 1 (PDF, 767KB) or phone your Regional LoCall number.

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Tuition Fees

Tax relief at the standard rate of tax (20%) in the tax years 2011 and 2012 is available for certain tuition fees. The maximum limit on such qualifying fees for the academic years 2011/2012 is €7,000.

2011/2012 only: the first €2,000 of each claim is disregarded for relief, where any one of the students in respect of whom the relief is claimed is a full-time student. In the case of a claim for relief where all the students concerned are studying part-time, the first €1,000 of the claim for relief is disregarded.

For more information see Leaflet IT 31 - Tax Relief for Tuition Fees.

Tax Relief Available to Systematic Short-time Workers

The exemption from income tax for Jobseeker's Benefit paid to systematic short-time workers has been extended indefinitely.

PRSI - Employers/Employees/Self Employed

Note: Any PRSI and Health Contribution queries should be directed to Department of Social Protection, Information Service at 1890 66 22 44 or at: www.welfare.ieExternal link

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Universal Social Charge (USC)

The USC is a tax payable on gross income, including notional pay, after any relief for certain capital allowances, but before pension contributions. The USC is effective from 1 January 2011 and and will be on a cumulative basis from 1 January 2012.

The rates and thresholds of the Universal Social Charge are as follows:

Individual aged under 70 years
Tax Year 2011 Rate of USC Tax Year 2012 Rate of USC
Income up to €10,036.00 2% Income up to €10,036.00 2%
Income from €10,036.01 to € 16,016.00 4% Income from €10,036.00 to € 16,016.00 4%
Income above € 16,016.00 7% Income above € 16,016.00 7%
Individual aged 70 years or over, or individual who hold a full medical card ( regardless of age)
Tax Year 2011 Rate of USC Tax Year 2012 Rate of USC
Income up to €10,036.00 2% Income up to €10,036.00 2%
Income over €10,036.00 4% Income over €10,036.00 4%
The Exempt Categories
Tax Year 2011 Tax Year 2012
Where an individual's total income for a year does not exceed €4,004 Where an individual's total income for a year does not exceed €10,035
All Dept of Social Protection payments Income already subjected to DIRT All Dept of Social Protection payments Income already subjected to DIRT

3% Surcharge (self-employment)

The surcharge of 3% on individuals who have income from self-employment that exceeds €100,000 in a year, regardless of age, remains unchanged.

Further Information

If you are a PAYE customer your tax affairs are dealt with in the region where you live. Check our contact details for more information.

If you are calling from outside the Republic of Ireland phone +353-1-7023011.

If you are taxed under the Self Assessment system you may contact the Revenue office shown on your notice of assessment.

Forms and Leaflets

To request any Revenue Form or Leaflet LoCall 1890 306 706 (ROI only), +353 1 7023050 (from abroad), visit any Revenue Office or see: Leaflets and Forms.

Please note that the rates charged for the use of 1890 (LoCall) numbers may vary among different service providers.

Accessibility

If you are a person with a disability and require this leaflet in an alternative format the Revenue Access Officer can be contacted at: accessofficer@revenue.ie

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PAYE Anytime

The quickest and easiest way to keep your tax up to date is to use PAYE Anytime. PAYE Anytime is an internet system that lets you do business with Revenue electronically 365 days a year. You must register first. Registration is quick and easy. See PAYE Anytime for more information.

Revenue
January 2012

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