Home Carer Tax Credit - When does it make sense?

[TTI]

Hi everyone,

I've been trying to understand the full scenario around the Home Care Tax Credit.

Looking at Example 3 here in the government budget example scenarios http://www.budget.gov.ie/Budgets/2019/Documents/2. Budget 2019 Tax Policy Changes.pdf
, for 70k Household income, 1 child, it shows an increase of 13,140-12,690, of which I understand 150 is due to the marginal rate increase and 300 due to the increase in the Home Carer Tax Credit.

"You cannot claim both the [broken link removed] for dual income couples and the Home Carer Tax Credit." https://www.revenue.ie/en/personal-...-credit-and-your-spouse-or-civil-partner.aspx

I'm trying to understand the detail of this. Do this mean that in 2019, if my spouses income were below 7,200 that I could have the full 43,550 standard cut-off rate and she would pay no PAYE tax as her Personal Tax Credit is 1,650?

Thanks,
omegab

 

[shweeney]

the Home Carer credit is worth 1500 this year. So if 20%* of the second persons income is less than 1500 (i.e. total taxable is < 7500) you should claim the carers credit. Otherwise claim the increased standard rate band.

*(20% being the difference between high rate and standard rate PAYE)