Statement of Liability - Query

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flashinglights

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Can anyone advise.

I do my SOL every year (joint with my wife), the pre check said it was 0.01c- every year is fine

As always I put in my medical and WFM. Last year my wife went on Carer Benefit midway through the year, when putting in SOL I inputted the 6 months CB plus again our Medical and my WFM and we got money back (a few hundred).

This year the same, except she has now done a full year CB so I put that amount in, which again I inputted along with Medical and WFM.

But it is saying we owe €3000. I know CB is taxable so I was expecting only a small return or nothing really, but is it at that amount? just seems a big jump from getting money back last year for 6 months of it, to jumping that high this year.

I looked back at 2024 SOL and everything is similar (my wage etc)
 
Carer's Benefit seems to be €271 p.w. so that's €14K p.a. And that's €7K more than she received last year so if you're on 40% tax then an additional €3K liability sounds like it's in the ballpark?

What's "WFM"?
 
Maybe the standard rate cut off points assigned are now different and the PAYE CREDIT your spouse for 2024 is gone

In year 1 she had employment and DSP income

In year 2 ONLY DSP income


Round figures

Assuming 20% tax not collected at source

3000/.20= 15k

You mentioned a refund in 2024 for 2023

Last year ye probably add 88k srcop less carers benefit

This year only one employment for last year so I'm assuming 53k srcop total for 1 employment income

And now carers benefit is added and tax

Maybe ye had a higher joint rate band in 2023 v 2024

Download the most recent 2023 tax cert

And download the most recent 2024 and compare
 

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Furthermore, just to add to this, you might be able to ask revenue to reduce your tax credits for 2026 and this will spread it over the next four years.

They may be open to that option in terms of repaying the liability.

Furthermore, to prevent the problem in 2027 in respect to 2026, you can call the Revenue PAYE department and ask them to allocate some of your rate band and tax credits to other income.

This essentially removes it from your tax cert (eg srcop and some value of the credits) to be used by your employer and just parks it in a holding bay,

15k taken off the rate band
and 3k taken off the credits

if you can imagine it.

And what it means then is when you declare the income next year from the DSP you will get your entire rate band available again to use

and that should cover the taxation on it.

So I would make a call to the revenue ask them about reducing your tax credits over the next couple of years if possible and also allocating some of your rate band for 2026 to other income to match the amount that will be received by the DSP. For example, the circa 15 grand.

it will all depend on how much credits ye have , .. but its worth the discussion

you dont want a repeat situation each year
 
Thanks for getting back. WFH = Working from home, there is a relief entitlement on this.

So it looks like for 2025, I was getting all the Credits:

1767896275080.webp


Which I presume is the reason this has come from

it advises they will reduce my tax credits over the coming years to pay back
Collected by reducing your credits in future years €792.70 2027; €792.70 2028; €792.71 2029; €792.71 2030

(I understand this now I think and am fine paying €66 a month to clear it as it is what is owed

Next, the 2026 tax cert, which I am completely confused by, now has the spouse having 2000 employee tax credits (nothing I have done to change it) but reduces the rate band by 53k as I am the sole earner to 20k because of the carer benefit

1767897463725.webp


"our rate band is now 20% taxable @ 32k and 40% over that"

This is a total spanner, is this right? as going into 40% @32k will be a big chunk of salary

If my spouse is down as "employee tax credit" should this not bring the rate band to 88k? then the 20k reduced off it?

Also, if the above is right and we are at 32k, Carers benefit entitles you to work 15 hours a week.

how many hours do you need to work so it can bring us into the 88k tax band? as this maybe the only way to keep the head above water.

Thanks all
 
A person is entitled to the employee tax credits if they have DSP income

See here

Employee Tax Credit

This page provides information on the Employee Tax Credit
www.revenue.ie www.revenue.ie


You might query with them why this was not applied for 2025 but is for 2026?

It's worth up to 2000 as you'll see

For the 53k cut off, that's correct for 2026 based on 1 employment income only

They are 2 separate things

Having an employee credit doesn't automatically mean a higher rate band of 88000 jointly

Adding carers to the cert for 2026 by reducing your rate band means you're/ ye are paying the tax on carers in real time via your payroll
As opposed to what happened, no tax collected and a liability at tax return stage
 
flashinglights said:
If my spouse is down as "employee tax credit" should this not bring the rate band to 88k?
Click to expand...
thecoffeepod said:
A person is entitled to the employee tax credits if they have DSP income
...
You might query with them why this was not applied for 2025 but is for 2026?
Click to expand...
Where? I can only see one employee tax credit of €2K for 2025 and 2026 and that's presumably the husband's?

There are two personal tax credits of €2K for both years.
 
Re. Home Carers Tax Credit listed on the tax credit certificate.


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 €53000 and the lower standard band for the stay at home person €35000
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 €44000. Any earnings above this is taxed at 40%
and the stay at home person CAN claim the home carer tax credit.
Home carer can earn €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 2025


But there is also an earnings limit;
Check the amount of carers benefit paid in the tax yr.
Im not sure what your amount is or if it is over the threshold.

There is a €7200 - €11k approx max earnings limit for the tax credit.

You could ask Revenue to calculate your tax liability for you WITHOUT the home carer tax credit included at all.

Try calling them early 9-30 am and someone will work the figures for you and check is it more beneficial to you both in 2025 to

1.forget about the home carer tax credit
2. Leave your STCOP €53000
3.Leave the carer STCOP €35000


Best of luck!
 
When I look at the tax credit certificate more closely I notice your wife is not getting any standard rate cut off at all.

It should be you €53k which I can see but I cant see the extra €35k? at all on the certificate

Apologies ..I didn't read through both tax years at the beginning.I was only looking at 2025 on its own first.
 
Last edited:
Thanks all for getting back, Suppose it is just a shock the STCOP drops to 33k @ 20%

yes I understand that DSP payment is taken from the source (better off IMO so this mess doesnt happen the end of the year)

I also saw something else if it can be explained.... for 2026, my credits are reduced by 4175 for Career, plus they are deducting the full amount €20k from my STCOP - to me this sounds like double, should it not be one or the other (as it comes to 24k)?

So just so I am clear when I call

1. I should ask why my spouse didnt get the employee tax credit for 2025 (€2000) if it is showing for 2026


Can my options be confirmed again please,

1. If it is just myself working (my wage does go over the STCOP) of almost 12k, so this now means, I pay 32k @ 20% and 33k @40%
Surely all in this is more than the 20% tax liability for Carer that revenue are to get?

2. My wife is in a bit of a panic, if she does go back to work, is there a minimum needed for her to do for us to get the 88k 20%?
(I understand the home carer rate gets removed, but couldl be benifical to go to 66k @ 20% (taking the 20k DSP off)
For carers you can do 18 hours, shoe could potentially find a few hours while our child is in education, like does she need to do 1 hour or 100?

Looking at all this it just looks like a big chunk is coming off each month as we are 2000 credits less than last year plus 20k less @ 20%

is there a way to calculate what a wage maybe after all of this so we can prepare?

Thanks again all, starting to make a bit more sense
 
For tax tear 2025 first..
1.Why your wife did not get a paye tax credit €2000 or a standard rate cut off point €35000 as she was a carer earning an income.

Can they rework your figures for 2025 with and without the home carer tax credit to see which is more beneficial.
 
The Benefit is only for 2 years

2024 - 6 months

For 2025 it was the first full year of getting the credit.

2026 - 6 months

I got through and they advised the 2000 credit was not there as DSW and revenue weren't in touch with each other regards taxable DSW benefits.

now they are, so it is paid at the source, instead of clawing back, which is why it showing this year aswell as the -20k from the 53k.

Hard to understand, but am i right in saying, each DCW is taxed at 20% (€4175 in our case as shown)

So will the bottom line be - €347 per month less in my wage?

or will it be more than that again as previously 22% of my wages was charged at 40% (over the 53k)

but now 50% of my wages are charged at 40% as its now dropped to 32k

1767960986382.webp
 
Hi all,

I have been trying to calculate what the difference will be to my wage for the coming year ( I am paid monthly) and it looks like it is around €550 less (more than my original calculation above)

Yearly this is €6600 which would be 33% tax because of the €20k Carer benefit.

Looking at the Tax credit sheet above (I understand they gave my wife 2000 credits, but does it look correct to both minus 4175 credits (20% of the Carer) and deduct 20k off my 20% rate band cut off?

id be 99% sure it is correct, but I wanted to check (struggling to get through to revenue)
 
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