PRSA Tax Relief

[Opal**]

I’m not sure if I should post this here or in the tax forum.

I was out of the workforce for a number of years and stopped contributing to my PRSA. I returned to PAYE employment this time last year so I didn’t have a PAYE liability for my 2019 earned income. I am jointly assessed with my husband who has PAYE income, other income (loss making) and we also have rental income between us. I want to restart my PRSA contributions and maximise any tax relief available on contributions.

I’m not clear what options, if any, I / we have for our 2019 income for tax relief if I make a PRSA payment before the 10/12/20 deadline. Alternatively if I leave it and make contributions in 2021, where do we stand on tax relief? Can this be claimed for 2019 next year? Will this effect our joint tax liability or just my portion if that makes sense?

 

[LDFerguson]

You can make a lump sum contribution to your PRSA before 10th December 2020 and claim tax relief against 2019 tax year. If you only restarted employment this time last year then you may not have had much earned income in 2019 an your limit for tax relief is a percentage of your income, the percentage depending on your age.

Your husband can make a pension contribution before 10th December 2020 and claim it against 2019 tax.

I'm assuming that neither of you were members of pension schemes in 2019. I'm also assuming that you file your 2019 tax return, elect to have the contributions included for that year and pay any liability (if applicable) before 10th December, using Revenue's online services.

The final date for making pension contributions to claim against 2019 tax year is 10th December 2020. If you leave it past that you can only claim against 2020 or subsequent tax years.

 

[Opal**]

Thank you so much for your reply. I received confusing information from Revenue but it’s actually quite straightforward so thanks for clarifying.