How does a person claim tax relief on a PRSA contribution beyond their age related allowable percentage.

[S class]

Pensions Manual chapter 24 states.....

"An individual who is not in pensionable employment is entitled to relief on contributions up to €1,525 even if the contribution exceeds the relevant age-related percentage limit (section 787E(4) TCA). This does not apply in the case of contributions to a PRSA for AVC purposes"

My wife has non pensionable employment earnings in 2024 of 1377 euro.

Her PRSA is not an AVC PRSA. She is not making the contribution for AVC purposes.

The above section implies that she should be able to make a PRSA contribution for the full 1377 euro and obtain tax relief on the full contribution.

Is this correct ?

If so. How is this claim submitted on Form 11 ?

 

[AAAContributor]

Is this correct ?

Yes.

How is this claim submitted on Form 11 ?

ROS is not programmed to handle this de minimis contribution.

It just applies the applicable age related limit to earnings, up to the earnings limit of €115k (if applicable), to determine the allowable contribution for tax relief.

If your wife is in her 60s, the calculator will calculate an allowable contribution for tax relief of €550 (€1,377 x age related limit for someone in their 60s of 40%), which is not what you want.

There are a couple of approaches you could try:

1. File the return (accepting the calculated contribution of €550) and submit a request via MyEnquiries (with reference to S787E(4) & PM24) for Revenue to amend on the backend.

2. Override the earnings figure in the ROS pension calculator. The calculator will pull in earnings entered in other parts of Form 11, €1,377 in this case. It is possible to delete the earnings figure (at least it is for self-employed income - this could be a bug and not a feature!) and insert a grossed-up amount for earnings of €3,442 ( €1,377 / 0.40 ). The calculator will then apply the age-related % to the grossed-up figure and a pension contribution of €1,377 should flow through to the tax computation section.

3. Send a query to MyEnquiries asking for guidance before you file - I think they'll probably refer you to action 1 above.

4. Take the life is too short approach - make the contribution and carry any unused tax relief forward (assuming there's future earned income of course).

 

[S class]

@AAAContributor

Thanks for the confirmation and suggestions.

I have sent an enquiry to revenue.

I was thinking if I don't get a satisfactory response from Revenue, I might not accept the automatic self assessment calculation and then insert the figures allowing for the full 1377 tax allowance.
I would then add a note explaining why I did not accept Revenues assessment.

I will also try overriding the calculator figure to see what happens.