Q. Can I claim tax relief on Permanent Health Insurance?

Tax relief is available for premiums paid in a tax year to a Revenue approved Permanent Health Insurance scheme.

The individual can get a relief at his/her marginal rate of tax (up to 41%).

Q. Can I claim tax relief on my medical expenses?

Any individual can claim tax relief on medical costs paid by them. However, an individual cannot claim for tax relief on costs already reimbursed by their healthcare provider. This relief is not provided through the payroll system but in the form of a refund by the Revenue Commissioners.

In order to claim the relief, an individual must complete a Form Med 1 and submit it to the Revenue Commissioners. In the case of dental expenses, the form to be used is a Form Med 2. Tax relief can be claimed for non-routine dental care, for example surgical extraction of impacted wisdom teeth.

A claim for medical expenses must be made within 4 years after the end of the tax year to which the claim relates.

The relief is given to the individual at 20%.

Q. Can I claim tax relief on my tuition fees?

An individual can claim tax relief on fees paid for Third Level courses in respect of any person as long as he or she has paid the qualifying fees.

Qualifying fees mean tuition fees but not examination fees, registration fees or administration fees, for an approved course of an approved college. Click here for more Information.

In 2014, tax relief is available at 20% subject to a maximum limit of €7,000. In order to be eligible, the fees must exceed €2,750 for a full time student (€1,375 for a part time student).

In order to claim the tax relief for tuition fees, you will need to contact the Revenue Commissioners (1890 333 425) and inform them of the details of the course and fees paid. This relief is provided through an upwards adjustment to your tax credits and is passed on to you through the payroll system.

Q. Can I claim tax relief on my pension contributions?

Pension contributions made by employees to occupational pension schemes are granted relief through the payroll system.

The payments are automatically deducted by your employer and the relief is then received through the payroll system.

Q. Can I claim tax relief on my VHI health plan?

If your employer pays your health insurance on your behalf to VHI or any other health insurance provider this is treated as benefit in kind (BIK). You will be subject to tax, USC and PRSI on the gross amount of the health insurance Premium. You are however entitled to tax relief at 20% on gross premium that you are assessed to BIK on. This relief is provided through an upwards adjustment to your tax credits and is passed on to you through the payroll system.

In order to have your tax credits amended you will need to give details of your health insurance premiums to the Revenue Commissioners. You can do this by calling 1890 333 425 but they will also ask you to submit a letter of confirmation which should be prepared by your employer.

Q. Can I claim tax relief on my rented accommodation?

In order to be able to claim a rental tax credit, the individual must have been renting a property in Ireland on 7 December 2010. An individual cannot apply for this relief if they started renting in 2014.

If an individual was renting on 7 December 2010 and are renting in 2014 then they are entitled to a rental tax credit of €160. Once claimed, this relief will be included in the employee’s Tax Credit Certificate and relief will be processed through payroll.

In order to claim the rental tax credit, the employee must complete Form Rent 1 and submit to the Revenue Commissioners.

Q. How much USC is payable?

If an individual’s income exceeds the threshold of €10,036 per annum, he/she is chargeable to USC.

The rates of USC charged are as follows:

  • The first €10,036 – 2%
  • The next €5,980 – 4%
  • Above €16,016 – 7%

Q. How is tax calculated when I am married and my spouse does not work?

The same rules apply to personal tax credits whether or not one or both spouses work.

The couple are still jointly assessed by the Revenue Commissioners.

The individual working is still entitled to a married tax credit of €3,300 but the married couple are only entitled to one PAYE tax credit of €1,650.

The individual working will also be entitled to an increased Standard Rate Cut-Off Point. The individual’s Standard Rate Cut-Off Point is increased to €41,800.

Q. How is tax calculated differently when married?

When a couple are married they are jointly assessed by the Revenue Commissioners therefore they can transfer their tax credits between each other.

For example in 2014; a married couple are entitled to a married tax credit of €3,300 and if both spouses are working as employees they are also entitled to a PAYE tax credit each of €1,650.

This total tax credit of €6,600 can be split between the spouses in whichever way the individuals wish to do so. This must be communicated to the Revenue Commissioners. If the Revenue Commissioners are not advised of an alternative split, each spouse will be allocated €3,300 automatically.

Similarly, a married couple will be entitled to an increased Standard Rate Cut-Off Point. As outlined previously, an individual’s Standard Rate Cut-Off Point is €32,800.

If both spouses work, the Standard Rate Cut-Off Point for the married couple is €65,600 (€32,800*2).

If only one spouse works, the Standard Rate Cut-Off Point is €41,800.

Q. Do I pay tax on everything I earn?

Yes. All income earned through an employment in Ireland is taxable.