Employee Tax Credit - Spouse Income

Hi All,

I have a query around Employee tax credit.

My wife did some part time work last year. Earning just over €1200 and paid no tax on it, although she did submit her P45 to revenue when she finished.

We are assessed for tax jointly and I have all the allowances. She was not given an employee tax credit - I read that she would be entitled to it.

I submitted my P12 last week and it now appears that my wife was in fact taxed at the higher rate and no additional allowances were given for her income.

Could this be because I am claiming the home carers credit - is this why she would not be entitled to employee credit. (I also read that the second income can be up to €8200 without this being affected)

If this is correct and had we of known up front that she would be taxed 40% on what she earned then we would have reconsidered - getting taxed 40% on minimum wage surely can't be right.

Anyway, sorry for the long winded post. Any advice would be appreciated.

Thanks - Bhoy1967

She should still be entitled to the employee credit but it will be limited to 20% of her employment income.

With the home carer's credit, you either get the credit (€1100 in 2017) or the extended standard rateband but not both. When the P21 is done, you get whichever is worth more to you.

Thanks for your reply Ciru75.

So it looks like they made a mistake in not giving the employee credit? I have sent in an enquiry. 20% tax is not too bad so.

I did read about the standard rate band not increasing as a result of the home carers credit. Hopefully my wife will get more time this year and that option may be more worthwhile.

Thanks for your help