Maternity Tax Credits

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Ballyman

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Hi

My wife is currently on Maternity leave from work. She has been on maternity leave for about 2 weeks now. She isn't being paid by her company while on leave (as the directors decided to pay themselves bonuses of millions during the boom while leaving the rainy day pot empty but thats another story) apart from a payment which works out at 10% of her annual salary (the company are paying the tax on this so she will get 10% net of her salary) at the end of this month.

Obviously she will be getting the maternity benefit during the leave period.

My questions is would it be better for us financially to have her tax credits transferred to me for the duration of the leave or would it be better for her to claim back her overpayment of tax at the end of the financial year.

Any advice greatly appreciated.
 
That depends on the level of her annual salary.

It's likely that it would be beneficial for you to take the tax credits, but without knowing her annual salary it's impossible to say for sure.
 
imo - Best to leave as is .

She now begins Maternity Leave 1st June and so she is due to return to work on 1st December .

As she has tax paid to 31st May this year , she could ask her employer to refund her the monthly tax credit on a monthly basis for the duration of ML .

Or she can leave as is and claim refund next year when doing her tax returns , but in this case , it could be February 2011 before she benefits .

If credit is transfered to you now , what is she going to use next December .?
 
Thanks for the replies. Her salary is approx €45K and mine is similar.

She probably won't be returning to work until March 1st (We hope!) if we can afford it.

We had either planned to transfer her credits to me until she returns to work OR let her claim overpayment of tax at the end of 2010 and 2011.

It doesn't matter to us which we do really once we don't lose out financially because we went with the wrong option. If it's the same result financially then we will probably leave everything as it is and claim overpayment.

Am I looking at this correctly?
 
Yes you appear to be looking at this correctly in my opinion .

But would like to hear other peoples views on this topic as well .
 
How are you tax credits and standard rate cut off points allocated at the moment?

It sounds as if there's no point in her transferring her personal tax credit to you (as her gross salary for 2010 will exceed €18,300).

As her gross salary for the year should be less than €27,400, there should be merit in you taking the higher standard rate cut off point of €45,400. She'll then get a standard rate cut off point of her gross salary (which should be circa €24,000).
 
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