Differences between tax credits, reliefs and exemptions

Tax credits

Tax credits directly reduce the amount of tax that you pay. Your tax credits are given for a full tax year. Some tax credits are given automatically and others you must claim. Use myAccount to claim additional tax credits for 2022 by selecting the icon ‘Manage your tax 2022’.

You cannot get a refund of any unused tax credits, and you cannot carry them over into another tax year.

Tax reliefs

Tax reliefs directly reduce the income on which you pay tax. They may result in you receiving a refund of tax paid. The amount of relief you receive depends on the rate of tax you pay.

If you pay tax at the higher rate of 40% your income is reduced by the relief and the balance is taxed at 40%. Otherwise it will be reduced by the relief and the balance is taxed at the standard rate of 20%.

Use myAccount to apply for these tax reliefs by selecting the icon ‘Manage your tax 2022’.

Tax exemptions

You may be exempt from paying tax on certain types of income you receive. You must meet certain conditions to qualify for an exemption. Examples include marginal relief and some social welfare payments.