Confused about standard rate cut offs

E

eiko

Registered User
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23
Hi,

I got a P21 balancing statement today stating an underpayment which I just don't understand and was hoping that somebody could help me with.

My husband is the main earner with approx 22k of his income being taxed at 41%. We are jointly assessed.

I started a part time job last September and earned 2,744 up till December. I paid USC on this but no tax. On speaking to revenue today, I am told that my income is taxable at 41% but I am only entitled to 548.80 (20% of 2744) of a tax credit. As such I am liable for 576.24 in income tax.

Is this correct? Not sure if it has any bearing but my husband gets the Home Carer Tax Credit of 810.00

Any advice greatly appreciated. Thanks!!

E
 
The person in Revenue is wrong. You are entitled to your own standard rate band of at least €23,800. Presuming you have no other sources of income for the year your tax credit covers your income tax.
 
Thank you and I hope so. I had an income of 990 for some freelance work which I submitted a Form 12 for. This I expected to pay tax on at 41% but not my PAYE income. It should not impact my income tax for my PAYE income though should it?
 
The person is Revenue is correct. You are not entitled to your own standard rate band if your spouse has home carer's credit. Revenue will calculate which is most beneficial to you i.e. the home carers credit or the extra rate band. But you cannot have both. Your PAYE credit is correct based on your PAYE income.
 
Nige said:
The person in Revenue is wrong. You are entitled to your own standard rate band of at least €23,800. Presuming you have no other sources of income for the year your tax credit covers your income tax.
Click to expand...

No the person in Revenue is correct (or in actual fact the computer system is correct!). Where the home carer's credit is claimed, then the max amount taxable at standard rate is 41,800. (See S.466A(8) and S.15(3) TCA97)
 
OK, not the answer I wanted to hear but it makes sense. Hard to know if it is even worth my while working given that.

Thanks for your help! E
 
I had read it as her husband having an income of 22k - not 22k at 41%, so sorry eiko, the others are right.
 
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