H
humphrg2
Guest
My friend is due a baby soon. Both she and her husband work is there any extra tax credits allowed when you start a family?
If either your friend or her husband decide to stay at home after the birth, tax credits (and some of the 20% allowance) can be transferred to the other person and a home carers allowance of €900 can be claimed.
Otherwise as j26 so succinctly put it, no and they'll have to pay for childcare.
Otherwise as j26 so succinctly put it, no and they'll have to pay for childcare.
Hi, i have been claiming home carers credit (900euro) to date 2009 as my husband was on social welfare payment and stay at home carer for our child. Now he is going to work part time (20 hours per week) and revenue have taken the total carer credits from us, although he will still be carer part time. Is this right? it was worth 17euro a week to us.
If his earnings are expected to exceed the cut-off point €5,080 for the year then the credit is withdrawn, however there is a scaled reduction in this. See the link above.
My husbands income will now exceed the limits but the tax office have put us on a Week 1 basis for the rest of the year, the person I spoke to told me she put us on a week 1 basis so we would'nt be cumulative and have to pay back the credit in our wages. The way she put it I understood when we look for a review for 2009 we would get the credit up to my husband starting work and they would allow for the 17euro credit a week up to that. If the credit is taken off us for the whole year we will owe tax for 2009 when the review is done. Am I right?
Ah no, I dont believe this. The credit was initially just given to us on our tax credit certs, did'nt even ask for it and now we will have to pay back tax because of it. They shouldnt allocate these credits until end of year in case people not entitled. So the person in tax office telling me she would put us on Week 1 basis so the lower tax credits would'nt cumulate would have been better of putting us on a cumulative basis and pay back the tax now while we are earning. I don't want a tax bill showing up in 2010. Could I ask them to switch us to cumulative now?
As you are entitled to the home carer tax credit pro-rata up till your husband started work, the week 1 basis would be the best way to go. This way you'll get your correct tax credits each week without clawback of HC tax credit (which should not be clawed back as you were entitled to it till OH started working). You won't get the benefit of cumulative tax if for example you have a week unpaid off, but you will be able to claim this back at year end. Make sure you have split all tax credits & cut off points between yourself & your hubby to your greatest advantage.
The problem is I cant find anywhere to say we are entitled to the home carer tax credit which was allocated up until my hubby started work. Is that the way it works?
Because he has started work now, he will exceed the yearly limit where carer credit is allocated. The person in the tax office did say we would get it up until he started working but the info leafet from tax office does'nt say this.
Because he has started work now, he will exceed the yearly limit where carer credit is allocated. The person in the tax office did say we would get it up until he started working but the info leafet from tax office does'nt say this.
There is marginal relief ( see the leaflet IT 66 ) and there are circumstances where the credit may still be given in a year when income exceeds the limits where it was given in the previous year ( again in the leaflet ) . In addition where there are small underpayments Revenue often do not seek to collect but leave them to set against any other future overpayments.
Thanks graham07. I will leave tax on Week 1 basis so. We did not have the relief in previous year so looks like we will have a tax underpayment - my calculations are 17euro x 26 weeks we got the credit for this year = 442euro. Cant see them writing that off, so will wait and see what review brings next year. Thanks again.