Tax Relief and Tax Credits in Ireland | Maximise Your Savings

Tax season can often feel overwhelming, especially when navigating the complexities of tax laws and regulations. Many individuals and businesses in Ireland may be missing out on valuable opportunities to reduce their tax burden. Tax relief and tax credits are essential tools to help lower your overall tax bill. You can make the most of available tax-saving opportunities by understanding how these benefits work, who qualifies, and how to claim them.

What is Tax Relief?

Claiming tax relief can lower your taxable income, ultimately reducing your tax liability. Tax relief applies to various expenses, such as medical costs, tuition fees, and pension contributions.

Tax reliefs can directly reduce the income on which you pay Income Tax. Revenue will deduct the amount of the relief from your income before your tax is calculated. They may be reffered to as ‘allowance’ or ‘deduction’.

What Can I Claim Tax Back On in Ireland?

If you’re wondering, ‘What can I claim tax back on in Ireland’? You might be surprised at the range of allowable expenses. Some common tax reliefs availablein Ireland include:

• Medical Expenses: You can claim tax relief on unreimbursed medical expenses, including doctor visits, prescriptions, and specific dental treatments.
• Tuition Fees: If you or your dependents are paying for third-level education, you may be entitled to tax relief on tuition fees (excluding student contribution charges).
• Home Renovation Incentives: The Home Renovation Incentive (HRI) scheme provides tax relief for renovation work on your primary residence.
• Pension Contributions: Contributions to an approved pension scheme are eligible for tax relief at your marginal rate.
• Rent Tax Credit: If you’re renting and meet the necessary conditions, you may qualify for a rent tax credit.

Besides tax relief, taxpayers in Ireland can also claim back on various tax credits, such as:

• Personal Tax Credit: Available to all taxpayers, helping to lower overall tax liability.
• PAYE Tax Credit: If you are a PAYE employee, you can benefit from this credit, which reduces the tax you owe.
• Home Carer Tax Credit: If you care for a dependent in your home, you may be eligible for additional tax savings.
• Single-Person Child Carer Credit: Single parents who care for a child may claim this tax credit.

Mortgage Interest Tax Credit

This credit is available for mortgage interest and applies to the interest paid in 2024, provided it exceeds the amount paid in 2022. Originally, the Mortgage Interest Tax Credit was only available for the year 2023; however, the Finance Act 2024 has extended this benefit to include 2024.

The credit’s value and all qualifying criteria for 2024 remain unchanged. The relief is available to homeowners with an outstanding mortgage balance between €80,000 and €500,000 as of December 31, 2022.

The credit can be claimed for the increase in interest paid in 2023 over that paid in 2022 and for the increase in interest paid in 2024 over the amount paid in 2022. The amount qualifying for relief at the standard tax rate of 20% is capped at €6,250 per property, which equates to a maximum tax credit of €1,250.

How to Claim Mortgage Interest Relief

To apply for Mortgage Interest Relief, you need to submit the following documents to the Revenue:

• A Certificate of Mortgage Interest for 2022
• A Certificate of Mortgage Interest for 2023
• A confirmation of the qualifying loan balance as of December 31, 2022

These documents can be obtained from your mortgage provider.

For PAYE taxpayers: Upload the documents via the Receipts Tracker, accessible through myAccount under ‘PAYE Services’ and ‘Manage My Record’.

For chargeable persons filing a Form 11: Upload the documents through the Revenue Online Service (ROS) using the ‘Upload Supporting Documents’ option under ‘Other Services.’

How to claim if you are a PAYE taxpayer

You can claim the credit for 2023 or 2024 by completing your Income Tax Return through Revenue. To do so, follow these steps:

1. Sign in to myAccount on The Revenue website
2. In the ‘PAYE Services’ section, select ‘Review your Tax for the previous 4 years’.
3. Request a ‘Statement of Liability’ for 2023 or 2024. 
4. Click ‘Start’ on the ‘Complete your Income Tax Return’ page.
5. Under ‘Tax Credits & Reliefs’, choose ‘You and your family’, then select ‘Mortgage Interest Tax Credit’.
6. Follow the steps to complete the claim.
7. Submit your Income Tax Return.

How to Claim Tax Relief

If you are a Pay As You Earn (PAYE) worker

Usually, your employer deducts the contributions directly from your wages and will give you the tax relief due. If your employer does not deduct the contributions, you can claim the tax relief in myAccount ROS by following these steps:

1. Sign in to myAccount.
2. Click ‘Review your tax for the previous 4 years’ under ‘PAYE Services’.
3. Request a Statement of Liability.
4. Click on ‘Complete Income Tax Return’.
5. Go to the ‘Tax Credits and Reliefs’ page.
6. Under the ‘Your job’ section, select ‘Additional Voluntary Contributions (AVCs)’ or ‘Personal Retirement Savings Accounts (PRSAs)’, and input all details regarding your policy.
7. Complete and submit the form.

Conclusion

When claiming back tax, keeping receipts and documentation for your claims is important, as Revenue may request evidence to support your application. By taking advantage of these tax-saving opportunities, you can ensure you’re not overpaying and maximise your savings.

If you are unsure about what you are entitled to, consulting with a tax professional can help you navigate the process efficiently. Stay informed and make the most of your hard-earned money by understanding your tax relief and credit entitlements!

At Nexiō, we handle complex tasks, ensure compliance, and prepare all the tax returns you are eligible for. Contact our Assurance team today to explore how we can assist you.