If a couple are separated or divorced then the following tax treatment applies:
- they are treated as single individuals
- legally enforceable maintenance payments made for the benefit of the other party to the marriage are deductible as a charge in arriving at the income tax liability of the payer, and are chargeable to income tax under Schedule D Case IV for the receiving spouse.(Maintenance payments solelyfor the benefit of a child/children are not deductible/taxable).
- each spouse will be entitled to the single persons tax credits and rate bands
- each spouse will be entitled to the one-parent family tax credit provided that they both satisfy the conditions that the child resides with each spouse for part of the tax year, and that each spouse is not living with another person as man and wife
The couple may elect for joint assessment only if:
- both individuals are resident in Ireland for tax purposes for the year of assessment
- legally enforceable maintenance payments are made by one spouse to the other and
- in the case of divorced persons, neither has re-married
If this election is made, the following rules apply:
- maintenance payments are not deductible in calculating the total income of the payer and are not assessed on the recipient
- the married person's tax credits and rate bands are granted
- if the wife has income in her own right, apart from maintenance payments received by her, the income tax liability applicable to each spouse's separate income is calculated using the separate assessment procedures.
One distinction between separated and divorced persons is that if an individual wholly or mainly maintains a separated spouse but does not qualify for a tax deduction for maintenance, e.g. because the payments are made under a voluntary arrangement, married persons tax credit may still be claimed but not double rate bands.
