tax refund maternity leave

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guideanna

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hi all,

I had 6 months off (not topped up) in 2016 for maternity leave.
I've yet to file my form 12 for rental income for same year but just wondering do i need to ring revenue and ask if i'm due a refund (my wages remained the same on my return so pretty sure my employer didn't' adjust my tax to allow for the time i didn't work).

Anyone any experience with this that could help me?
 
State maternity benefit has been liable for Tax since 2013, so it's unlikely there is a refund due. Tax is deducted by way of a reduction in you tax credits and band.

Once you applied for benefit, Revenue would have issued a new tax credits certificate to you employer. Your state maternity benefit does not appear on P60.

You can ask Revenue for a balancing cert to confirm.

Otherwise unfortunately you'd need to calculate it out manually yourself as I'm not aware of any online calculator that will make the necessary adjustments to tax credits for you. Your tax credits certificate should be available on revenue website if you don't have a copy.
 
Hi guideanna, I was in the same position last year. I started to rent my apartment in Oct and i went back to work (paye)in late December. I used an accountant and she worked out my tax due for this year and i got about 1000 refund from revenue. You overpay in tax while you are on maternity pay. Make sure you put in medical expenses also.
 
My wages were not adjusted on my return to work (started leave in March-returned in September) so i'm more thinking i may be due something relating to my job taxes not the maternity benefit itself.
I don't plan to use an accountant this year as i usually file my own return it's just this is bit out of the norm for me.

Is it a P21 balancing i'd be looking for? Would they be able to issue that when i haven't filed my returns yet?
 
Sorry, I think you're right that you won't be able to get a P21 as they expect a form 12 from you.

A quick way would be to use the total income from P60, and add your state maternity, and then input those numbers into Deloitte calculator and compare to your P60. The USC and PRSI will be off, but the 'net tax' shouldn't.

Deloitte.ie/tc
 
guideanna said:
Thanks RedOnion will try this and see. Appreciate the response. :)
Click to expand...
Hi @guideanna ,

I have to apologise, I was incorrect in my early advice, and I hope you've got sorted by now.

What I didn't appreciate was that when Revenue issue amended Tax Credit Certificates at both the beginning AND the end of maternity leave, they are both issue on w Week 1 basis. This means your employer payroll doesn't do a cumulative tax calculation, and is the reason your pay remained the same when you returned.

As @Superstitious correctly pointed out, when you haven't received any top-up from your employer, you will have over paid tax. This impacts even if you are only paying tax at the lower rate, so long as you are paying tax and haven't transferred credits / bands to your spouse. Back of an envelope calculation it's about 428 overpayment in income tax at the lower rate, plus you'd be due a refund of USC as maternity benefit is not subject to USC, and on a week 1 basis it would be assumed you earned the same amount for the full year.

I haven't done a calculation for the higher rate, but I'm assuming it's higher. In the case of maternity benefit crossing year end, a person would be overcharged tax in both years that they'd need to reclaim via a balancing statement.
 
As stated Maternity Benefit is Liable to Tax since 2013.What needs to be ascertained is how your employer will determine what happens to your maternity benefit whilst on maternity leave, in other words what terms and conditions do they set out in your contract of employment. There are two ways employers may treat maternity benefit.
1) You may receive your full Salary/Pay/Wages as normal, but they will request you to sign the maternity benefit over to them.In this case your Payroll Department will adjust your salary to reflect this. The equivalent result of this is your Salary LESS MATERNITY BENEFIT will determine the correct amount of Tax to be deducted e.g. Normal salary say €2,500.00c Benefit €900.00c (Monthly Figures Used Here) so the balance is €1,600.00c Add back the the Benefit €900.00c and then you are liable to be taxed on only €2,500.00c (The Adjusted Salary plus Benefit) Payroll then can run it properly on a cumulative basis. It should be noted that The USC Charge and the PRSI Deductions only APPLY to the €1,600.00c adjusted salary.

2) If your employer does not pay Salary during Maternity Leave,then you receive the Benefit in full (Still Liable to Tax). Of course your SRCOP and Tax credits will need to be adjusted to properly deduct tax for the receipt of benefit, however you will need to do this yourself by contacting the Revenue office of where you live.The year end Income from all sources is totaled and reflected on your P60. With this you can request a P21 Balancing statement, which gives the result of Taxes USC, PRSI deducted.Please note the adjusted SRCOP Tax Credit Cert will ensure the correct taxes are deducted in relation to the Benefit, if your employer does not pay you your normal salary.

Do ascertain the Terms and conditions of your employment in relation to Maternity Benefit, from your H.R.Department.
 
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