Utilising pension contributions for income tax purposes

[HeinekenTick]

If someone made pension contributions during 2009 but has sufficiently low income from 2009 to eliminate an income tax obligation without considering the pension payments (i.e. by means of personal and PAYE tax credits), can the person simply leave the pension payments off the 2009 tax return and carry them forward to offset against 2010 income?

thanks for clarification on this matter.

 

[Homer]

No You can only carry forward contributions that are in excess of the amount that can be offset against your income for tax purposes. The fact that you were already below the income tax threshold does not alter this. You should however be able to claim relief from PRSI and the health levy (but not the new income levy), if you have not already got this relief at source.

If you have flexibility to vary your contributions without losing out on company contributions/employer funded pension accrual, you should consider holding off paying further contributions until you exceed the income tax threshold.