The Irish tax system provides substantial tax reliefs for many forms of activity, income and expenditure.
This page describes some of the tax reliefs that do not tend to be credited automatically and which, in many cases, those who are eligible never get around to claiming. The list below is not exhaustive and the information we provide is not definitive. For full details please consult the Revenue’s website.
How does tax relief work?
In many cases tax relief is credited to you automatically. PAYE employees do not need to apply for the PAYE tax credit, as it is given to them automatically through the payroll system.
However some forms of tax relief, such as Rent Relief for Private Rented Accomodation, need to be claimed, typically by filling in a form and sending it to the Revenue. Many people never claim these reliefs, either because they are not aware that they exist, they do not understand how to claim or because they never get around to claiming it.
Dependant Relative Tax Credit
If you maintain at your own expense a relative that is incapacitated by old age or infirmity from maintaining themselves, then you may be eligible for Dependant Relative Tax Credit. To be eligible for this tax credit, the relative must be a parent, mother-in-law or father-in-law and they must have insufficient income to maintain themselves. In 2015, this means an income of under €13,873 per annum.
Amount of Tax Credit in 2015
If you are eligible for this relief you may also be able to claim the following additional reliefs:
- Medical Insurance Relief for insurance premiums paid for that relative
- Health Expenses Relief in respect of the cost of qualifying health care provided for that relative
- Mortgage Interest Relief in respect of interest paid to provide the relative with his/her sole main residence
Health/Medical Expenses Relief
You may claim tax relief in respect of the cost of certain medical expenses paid by you. You cannot claim tax relief for any expenditure which:
- has been, or will be, reimbursed by another body other than the Revenue such as a health insurer or the HSE
- has been, or will be, the subject of a compensation payment
- relates to routine dental and ophthalmic care.
You must make your claim within 4 years of the end of the tax year in which the expense arose.
You may claim in respect of yourself, your spouse, any children that are under 18 or in full time education, or a permanently incapacitated non-relative over 65 years old provided that you have paid the relevant expense.
For expenses incurred from 2009 onwards, the rate of relief is the standard rate of tax (20% in 2015) on the full expense incurred. Thus you could claim €200 of tax relief on a medical expense costing €1,000. The exception here is nursing home expenditure, where tax relief at your highest rate of income tax may be available.
Home Carer’s Tax Credit
You can claim the Home Carer’s Tax Credit if you are a married couple where one spouse is the Home Carer and cares for one or more of the following:
- A child living in the family home for whom Child Benefit is payable
- A person aged 65 years or older living in the family home
- A person living in the family home that is permanently incapacitated by reason of mental or physical infirmity
- A relative aged 65 or older, or incapacitated by reason of mental or physical infirmity, living within 2 kilometers of the claimant
The couple must be jointly assessed and the Home Carer must have income not exceeding €5,080, with a reduced credit payable if the Home Carer earns between €5,080 and €6,700 (2015 figures).
Amount of Tax Credit
€810 in 2015
Single Parent Child Carer Tax Credit
You are eligible if you have a dependant child resident with you for all or part of the tax year, and you are not living with another person as husband and wife and you are not entitled to the Married Person Tax Credit.
€1,650 (2015 figure)
Permanent Health Insurance Relief
You are eligible for this relief if you pay premiums for a Permanent Health Insurance or Income Protection insurance policy. These insurance policies offer continuance of income at a reduced level in the event of incapacity due to illness or injury
If your employer is facilitating your contributions via the payroll system, tax relief will be granted automatically. However if you are paying for an Income Protection policy by other means, you will need to claim the tax relief by completing a form, and sending it to the Revenue.
Tax relief is given at your marginal rate. Thus, if you pay €1,000 a year into an Income Protection policy and pay income tax at 40% on any part of your income, you should receive tax relief of €400.
Rent a Room relief
Rent a room relief is available for those renting out a part of their principal residence, presuming their principal residence is located in Ireland. It is not available where the person renting the room is a connected person – e.g. a child of the people owning the house. It is only available for individuals and jointly assessed couples, not companies.
Up to €12,000 per annum rent (2015) can be taken tax free under the Rent a Room scheme.
Rent relief for private rented accomodation
An individual paying rent for private accommodation used as a sole or main residence, who was already renting at 7 December 2010, can claim this relief by submitting Form Rent 1 to the Revenue. You should note that rent relief is being phased out by 2018.
In 2015 the relief due is 20% of any rent paid up to the following maximum rent payments:
- Single and under 55: €600 (thus, maximum €120 relief)
- Single and over 55: €1,200 (thus, maximum €240 relief)
- Widowed/married and under 55: €1,200 (thus, maximum €240 relief)
- Widowed/maried and over 55: €2,400 (Thus, maximum €480 relief)
The level of relief is to be gradually reduced to zero by 2018.
You are eligible if you pay fees to a Third Level College on behalf of yourself or any other individual.
- The course must be an approved course in an approved college in the state or in another EU member state. For some post-graduate courses non-EU member state institutions will qualify.
- Full-time and part-time undergraduate courses must be of at least 2 years duration
- Post-graduate courses must be of at least 1 year not more than 4 years duration
- Training courses in the areas of foreign language and information technology must be of less than 2 years duration
The Department of Education supplies revenue with a list of approved courses every year, but even if your course is not listed you may still be eligible for relief.
Relief varies depending on the course. In general, as of 2015, tax relief at the standard rate (20%) can be obtained on fees of up to:
- €7,000 for undergraduate courses
- €315-€1,270 for foreign language and IT courses, depending on their nature
In effect, for undergraduate courses, the amount of relief is capped at €1,400 (20% of €7,000).
The first €2,750 of fees (for a full-time course) and €1,375 of fees (for a part-time course) paid by family or individual will not qualify for tax relief. If you are claiming for more than one student, you will get full tax relief on tuition fees (including the Student Contribution) for the second or subsequent students.