Is my mother entitled to the Employee Tax Credit?

murphaph1

Registered User
Messages
23
Hi all,
I really hope someone can give me a definitive answer on this. It will be much appreciated as I am confused about it.

I have done my mother's tax returns for a few years. Her case is very simple. She's 79, widowed, and in receipt of the full state pension (contributory). She also has rental income in the amount of ca. 30k a year. That's it on the income side. No occupational pension etc.

Some sources, such as the Revenue, seem to suggest that having "DSP income" would entitle one to the Employee Tax Credit:
Employee Tax Credit
You can claim the Employee Tax Credit if you receive income that is taxable under the Pay As You Earn (PAYE) system. This includes:

wages
benefit in kind
occupational pensions
Department of Social Protection (DSP) income.

Is the State pension (contributory) "Department of Social Protection income"? Or do they mean things like JSA/JSB?

I have only ever claimed the following for her tax credits wise:
Personal Tax Credit : 2190
Age Tax Credit : 245

It never even occurred to me that a credit called "Employee Tax Credit" might be available to non-employees but it seems that it is definitely available to (for example) people in receipt of an occupational pension paid through the PAYE system. You live and learn.

So, is my mother entitled to this credit? (In which case I've caused her to lose a lot of money in tax over the last few years)

Many thanks for any help.
 

Shirazman

Registered User
Messages
318
One word answer: YES!

Longer answer - using what you posted above:

"You can claim the Employee Tax Credit if you receive income that is taxable under the Pay As You Earn (PAYE) system"

Q.
Is the State Contributory pension taxable? A. Yes it is. Therefore ........................................... ! ;)
 
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murphaph1

Registered User
Messages
23
Thanks Shirazman! I saw your answer to another member a few days ago but his mum had a Zurich pension as well so I wasn't sure if she was entitled because of her DSP pension or the Zurich one.

So, the million dollar question. Can she request a refund of overpaid tax due to my error and of so, how far back?

I can't believe I messed this up but in fairness, they could name the tax credit something a bit less misleading. Employee & Retiree Tax Credit or something.
 

Shirazman

Registered User
Messages
318
Yes. You can apply for a refund for each of the past 4 years.

I assume that you've filed a Form 11 for each year?

In which case I assume that you'll now have to file an amended one for each year - this time with the "CLAIM FOR EMPLOYEE TAX CREDIT" box ticked. :)
 
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murphaph1

Registered User
Messages
23
Thanks a lot guys. It seems I have cost her about 6.5k then as she ceased PAYE employment 8 years ago. Up until that point I was obviously claiming the ETC for her. She doesn't care but I am kicking myself over this. She's just delighted she is in for a refund of tax so thanks a lot for your swift help here.

I submitted the returns on ROS so it looks like I need to go back in there and amend them. I will do that tomorrow.
 

torblednam

Registered User
Messages
688
Just be sure to get the 2017 claim in before the end of 2021. The 4-year limit for refunds is set in stone unfortunately.
 

murphaph1

Registered User
Messages
23
Morning folks,
So first question...
How do I do this in ROS? Is it as simple as opening the Form 11 again and resubmitting the whole thing or is there a special trick to amending a previously filed IT return?

I see a Review Your Tax section but it only seems to go back to cover 2019 & 2020:
Screenshot from 2021-11-23 08-01-09.png

If I try to go back further to 2018 I have a different screen:
Screenshot from 2021-11-23 08-04-01.png

Is this even the correct area I'm in? If I try to click "submit" for 2017 or 2018 I get an error like this:
Screenshot from 2021-11-23 08-06-16.png

Is the error telling me, in a roundabout way, to go and complete a Form 11?

If I do complete a form 11, how will the payment part at the end work? It will presumably still think that tax is owed, just less than before, but of course the tax (including the overpayment due to my not claiming the ETC) has already been paid for each of these years. Preliminary tax was also paid in accordance with the rules (roughly 90% of expected tax liability each year paid as prelim tax).

I would very much appreciate a last bit of help to get me over the line here :)
 

murphaph1

Registered User
Messages
23
Ok as I'm tight for time I just resubmitted the Form 11s in "Amend mode". For anyone else that might find this page through searching, you just make like you are submitting the form again and it will give you a warning that it's in "amend" mode (certain items cannot be amended). You then change what you need and save, then proceed to the self assessment page, transfer the values (have to manually transfer the paid prelim tax as always) then save, then go to the sign & submit and send the return (if you have overpaid then I guess it's file return without payment-I hope so anyway as that's what I did as in all 4 amendments the system seemingly correctly calculated an overpayment of 1650 in each tax year).

Cross your fingers there's a refund issued :)
 

Shirazman

Registered User
Messages
318
Ok as I'm tight for time I just resubmitted the Form 11s in "Amend mode". For anyone else that might find this page through searching, you just make like you are submitting the form again and it will give you a warning that it's in "amend" mode (certain items cannot be amended). You then change what you need and save, then proceed to the self assessment page, transfer the values (have to manually transfer the paid prelim tax as always) then save, then go to the sign & submit and send the return (if you have overpaid then I guess it's file return without payment-I hope so anyway as that's what I did as in all 4 amendments the system seemingly correctly calculated an overpayment of 1650 in each tax year).

Cross your fingers there's a refund issued :)

That sounds right.

And, even if you have to follow up, at least you have filed the 2017 revised Form 11 before the cut off date, so, sooner or later she'll get the refund due.
 

murphaph1

Registered User
Messages
23
Yeah I was thinking the same. The main thing was to get the amended 2017 return in before year end and I've done that. I will post an update here when everything is done, for completeness :)
 

moneymakeover

Registered User
Messages
711
Is there a "bug" in the revenue system where
If you declare pensionable income, they should automatically allocate paye tax credit?

Or something along those lines... Alert, letter etc
 

murphaph1

Registered User
Messages
23
It would have saved my mother 6.5k if they had :-(

The very fact they changed the name from PAYE Tax Credit to Employee Tax Credit was a strong, but entirely misleading hint that only employees should avail of the credit. It was actually more precisely named (though still not ideal as DSP pensions are not paid through the PAYE system) before. They should maybe rename it to PAYE/DSP Tax Credit or something. I suspect I am not the only person to make this incorrect assumption.
 

murphaph1

Registered User
Messages
23
So for the sake of completeness...
Revenue swiftly acknowledged and approved the amended tax returns and will deal with the over payments.
A costly lesson learned, but at least the error was spotted now and not completely missed.

Thanks again for your help.
 
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