Revenue Query: Rental Income Incorrectly Attributed on Assessment

S class said:
Presumably you have paid any tax due.
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Thanks @S class

I have paid PAYE tax at source. My wife hasn't paid tax on rental income yet as she was waiting for assessment since 18 Oct.

As per her calc, the tax on rental income should be around 4.xK whereas as per revenue it is 9.xK - because they have calculated at my tax rate of 40% and also added USC.

What do you reckon, should we pay this 9.xK by tomorrow's deadline and than get it sorted with revenue?

If we pay 9.xK, would it be too difficult to get 4.xK back?
 
Yes pay the 9k now.

Any overpayment will be returned within a few days of submitting an online form 11.

If you have to submit a paper form 11 it will take a bit longer.
Maybe a few weeks.

She will be liable for class S Prsi at approx 4.2%.
She will get 52 class S contributions which are reckonable for the contributory pension.

She would have these converted to class K if she takes up any PAYE class A employment in any future year. Even 1 class A contribution in any particular year would cause this.

The Prsi charge for class K is exactly the same as for class S.
Class K is not reckonable for the contributory pension.

Check out this thread for more details on this.

Key Post - PRSI and planning retirement

This Key Post is in the form of a FAQ where I don't know many of the answers. I will update the post as I get answers. 1. PRSI payable on reaching state pension age Answer: 0 (Class M) 1a. Does this relate to the start of the tax year in which you become 66? Or to after your birthday? Answer...
www.askaboutmoney.com
 
So I called revenue phone line yesterday. The lady on the phone said my wife's rental income has been added to my income because (1) we are jointly assessed (2) my wife doesn't have any PAYE income in 2024 (3) my wife has claimed home carer tax credit of 1800e.

So instead of paying rental income tax of 3892e (@20%) we have to pay 9341e (@40% + 8% USC). Is this how it is supposed to be?

I asked her if we can amend the tax submission to change joint assessment and remove home carer tax credit. She said you can not amend joint assessment now. In fact you can not amend joint assessment even for 2025 - as the time window for 2025 was till March 2025. You can amend going forward for 2026.

This forum has been really helpful so far. I need further help to find out if we can pay rental income tax @20% in above situation.
 
Info_Seeker said:
So instead of paying rental income tax of 3892e (@20%) we have to pay 9341e (@40% + 8% USC). Is this how it is supposed to be?
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Yes, if she claims the home carer credit, that's the way it works. I had the same issue at some point when I hade a tiny self employment (before a specific tax credit was introduced for that income).
With an income over €10800, is she actually able to claim the home carer credit? I am very surprised.
 
Note that on top of the 20 per cent, PRSI of at least €650 would also be due as well as USC.
 
Info_Seeker said:
I asked her if we can amend the tax submission to change joint assessment and remove home carer tax credit.
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I don't believe the joint assessment is the issue but only the home carer credit. If she has very little income, the joint assessment should be beneficial as it increase your tax band at 20% to 51K.
 
Premos said:
With an income over €10800, is she actually able to claim the home carer credit? I am very surprised.
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This is a mistake / negligence on our part. She is a first time land lady with first year of rental income in 2024. So home carer credit stayed there from previous year.
 
Info_Seeker said:
So I called revenue phone line yesterday.
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I would not be relying on anything anyone in revenue tells you over the telephone. You need to ring them a couple of times to see if you get different answers. That will give you a better idea of what actually needs to be done. But you need also to send queries in writing. Preferably via - MyEnquiries- on the revenue portal. You can go in via LPT if you are not registered for the RAS/Ran thing. I sent in two enquiries around 8 days ago on LPT and have not received a reply yet. So as far as I'm concerned I'm compliant and they are delaying me finishing off my lpt/VHT return (it's a bit of a complicated situation) . I know there was a hugh backlog as everyone had to revalue their properties this year, and in addition the revenue systems crashed a few times. So they extended deadlines etc.
 
I would also email via My enquiry. my experience was more positive as I did that twice in the past week and was answered in an hour or so. I am surprised that the hoe carer credit can't be removed if it is actually no longer applicable.
 
Likewise, don't accept phone advice as gospel.

I have amended backdated form 11s after a few years.
When you get ROS access, check if you can access the 2024 form, presumably you will get access to the 2025 form in early 2026.

You can amend these in any way you choose.
The forms are pre populated with income details for both of you.
You can delete all this data and add your own data in.

You can delete the rental from your employments and add the rental as your wife's employment.

You can delete the home carers credits if these are not allowed.
Your wife will have personal credits but she will not be allowed any PAYE/ earned income credits.

You can delete and amend data as many times as you like before you submit the form 11.

If after submitting you discover you have made a mistake, you can reopen the form and further amend it and then resubmit.
 
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Thanks @S class @Premos @Bronte

You guys are spot on. I rang them up again just now. The person today said home carer can be removed (the lady yesterday said it can't for 2024 and 2025). I asked him to remove and he did. Now the return has gone into review. Will find out in a day or two if it reduces the tax. I will update here for the benefit of readers.
 
Perfect example of:

a) keep asking until you get the right answer
b) keep going until you get someone competent who will help you
c) don’t rely on the first answer
d) get advice in writing if need be, generally the case, but not always
e) AAM gives good advice
f) if you get the right person in revenue they can sort you out
 
The Revenue allow 2 different ways to calculate your tax liability when one jointly assessed person is claiming the tax credit.

From Revenue website:
You cannot claim both the increased standard rate cut-off point for dual income couples and the Home Carer Tax Credit during the tax year. Your Revenue office will help you to determine which is better for you.

So option 1:
The increased standard rate band for you €51000 and the lower standard band for the stay at home person €33000
But no home carer credit is allowed to be claimed at all for that year.
Must be Jointly assessed.

Option 2:
Both of you have equal standard rate cut off bands €42000
and the stay at home person can claim the home carer tax credit.
Home carer can earn €7200.
You can divide the rental income between you as you wish.(You could take the excess rental income above €7200)
Must be Jointly assessed.

Option 1 is often more beneficial if 1 person is in the higher tax bracket.

Revenue are supposed to calculate under both above options and tax you accordingly in the most beneficial way.
So its helpful to run the numbers yourself aswell just in case and understand both options open to you.
The figures above are for 2024.
 
Is one of the issues not that the poster and wife are not jointly assessed and that joint assessment cannot be backdated?
 
Millie* said:
The Revenue allow 2 different ways to calculate your tax liability when one jointly assessed person is claiming the tax credit.

From Revenue website:
You cannot claim both the increased standard rate cut-off point for dual income couples and the Home Carer Tax Credit during the tax year. Your Revenue office will help you to determine which is better for you.

So option 1:
The increased standard rate band for you €51000 and the lower standard band for the stay at home person €33000
But no home carer credit is allowed to be claimed at all for that year.
Must be Jointly assessed.

Option 2:
Both of you have equal standard rate cut off bands €42000
and the stay at home person can claim the home carer tax credit.
Home carer can earn €7200.
You can divide the rental income between you as you wish.(You could take the excess rental income above €7200)
Must be Jointly assessed.

Option 1 is often more beneficial if 1 person is in the higher tax bracket.

Revenue are supposed to calculate under both above options and tax you accordingly in the most beneficial way.
So its helpful to run the numbers yourself aswell just in case and understand both options open to you.
The figures above are for 2024.
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Thanks @Millie* for this. Very helpful
 
Hi All,

UPDATE: With the help of this forum, the tax has been reduced to 20% in the latest assessment. Thanks a million for the guidance.

QUESTION: When the first revenue officer worked on the case, she had counted my wife's rental income as my income. Since the rental income is more than 5K, she had told me that I should file form 11 from 2025 and I should have a ROS online account.

I have received RAN for ROS registration. The RAN letter is in my name. I do not have any income other than PAYE. I am planning to write in myenquiries that the form 11 and ROS registration obligation should be on my wife and not on me. I shouldn't be filing form 11. Any suggestions/guidance on the direction I am taking?
 
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