Ahai

[ice]

Tax Credits and Rate Bands

I have worked full time and my wife stayed at home with the kids YTD 2006 , thus i got the €41000 lower tax band one paye tax credit and a carers allowance for my wife.

Now its a possability we will swap roles.

Questions:Re 2006 Tax Year

1. Will we both be entitled to PAYE Tax Credits...???
2. Will we have an increased lower tax band ...as we would have both worked in 2006 tax year individulisation would grant us both a seperate lower band of €32000...note we will both earn up to that limit within the year...???
3. Would there be a transfer of Tax Credits to my wife when we swap over...???

Many thanks for any info.

 

[CCOVICH]

Could you explain the relevance of the thread title to your query?

 

[asdfg]

1. Will we both be entitled to PAYE Tax Credits...???

You are both entitles to the PAYE tax credit of 1,490. This credit is not transferable but with both of you working during the year both of you are entitled to it.

At the end of the year both of your incomes are added together and the tax credits deducted

2. Will we have an increased lower tax band ...as we would have both worked in 2006 tax year individulisation would grant us both a seperate lower band of €32000...note we will both earn up to that limit within the year...???

Yes

3. Would there be a transfer of Tax Credits to my wife when we swap over...???

Unused tax credits and unused SRCOP will be transfered. Contact revenue, should not be a problem. It will balance out at the end of the year.

Revenue may calculate your income and you may get a refund but your wife will pay a higher amount of tax but as I have already said it will balance out at the end of the year.