Ham Slicer
Registered User
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Does the above not relate to staying at home to look after an elderly or infirm relative? The OP seems to think it refers to looking after one's children.
Ham Slicer - isn't it the case that the increased standard rate band issue might only preclude claiming the credit for the remainder of this year for example but that next year if one parent is not working and is minding the child(ren) at home then the increase in the standard rate band is no longer an issue (only one person working) so the credit may be claimed? I know that I found this a bit confusing when we had our kid last year but ultimately we received the credit from last year even though my wife was working for part of the year with me on 42% and her on 20% in case that's relevant...
Ham Slicer, you have got it wrong on this point. The increased standard rate band for a married couple is €41,000 + income of other spouse to a max of €23,000. A single persons standard rate cut off in 2006 is €32,000, but a married couple with one income is €41,000.
You are right where you said that a married couple cannot claim both the increased standard rate band and the home carer's tax credit. However if there is just one income, then there is no standard rate band to increase! And the Home Carer's Credit is claimed. The couple will be taxed as follows: €41,000 at 20% and Balance of Income at 42%. If the husband's taxable income is say €50,000, then the gross tax is €11,980. (It should be noted that in calculating total income no account is taken of the Carer's Allowance payable by the Department of Social, Community and Family Affairs).
If the spouse has already earned over €6,620 so far this year, it will be more beneficial for the couple not to claim the Home Carer's tax credit for this year and opt for the increased standard rate band. (i.e. no further action presuming the couple are jointly assessed).
Clubman, on a separate point, it is now possible to claim for Medical Expenses Relief for 2005 and order a P21 Balancing Statement for 2005 using the full suite of ROS on www.ros.ie . No need to fill out Med1's and get signatures (or Med2's for that matter!). P21's usually take about ten working days to issue.
If the spouse has already earned over €6,620 so far this year, it will be more beneficial for the couple not to claim the Home Carer's tax credit for this year and opt for the increased standard rate band. (i.e. no further action presuming the couple are jointly assessed).
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