What would my tax credits increase to if wife stopped working?

P

peterwilson

Registered User
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Hi
Im trying to work out if my wife would be better off working or not.

If I took her tax credits how much extra would I earn tax free?
Or is it that simple?

Thanks
pw
 
I just don't understand the revenue.ie website

"If both spouses or civil partners have taxable income, they can decide which spouse or civil partner of them is to be the assessable spouseor nominated civil partner and request their local Revenue office to allocate the tax credits and standard rate band between them in whatever way they wish. [PAYE tax credit, employment expenses and the basic standard rate band of €23,800 are non transferable.]"
 
A married couple have standard rate cut off of 65,600 but the maximum either party can have is 41800. So if you earn more than that you pay 41% either way.

If your spouse gives up work the you could claim her tax credit and the 9,000 increase in standard rate band, so it's 9,000 x 21% = 1,890 + 1650, so not that much.
 
Joe_90 said:
A married couple have standard rate cut off of 65,600 but the maximum either party can have is 41800. So if you earn more than that you pay 41% either way.
Click to expand...

Thanks Joe

Im on 50K

So (excuse the ignorance) I would pay 41% on the excess of 41,800?

What am I currently paying 41% on?
41,800 - 9000?

Joe_90 said:
If your spouse gives up work the you could claim her tax credit and the 9,000 increase in standard rate band, so it's 9,000 x 21% = 1,890 + 1650, so not that much.
Click to expand...

So 1650 is her tax credit?

So it'd be 1890 + 1650 would be what I'd gain from the increased band and tax credit?

Thanks for the help
 
Assuming that you have the max possible SRCOP (spouses can split it evenly), you're currently paying 41% on 50000-41800=8200.
Your spouse would have tax credits of €1650 personal credit (you can take this if she stops working) and an employee credit (not available for self employed people) of €1650 (which you can't take if she stops working.
As per my own post, if your spouse stays at home minding children, you can then avail of the home carer credit worth €810.
 
You can't claim both home carers allowance and increase in couples tax bands,just whichever is more beneficial.
 
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