Real Time Credit claim with Med 2

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igesio

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Hello
I would like to get money back on my orthodontic treatment which I paid €3325 for in one payment. I believe I am entitled to €665 back off the government.
Source: Revenue/Health Expenses (edit: sorry, I am not allowed to post links)

I know it is possible to get this as a lump sum at the end of the year, however, I would like to get this money back as quick as possible. I believe one way of doing this is via a Real Time Credit claim. I believe my orthodontic treatment (Invisalign) qualifies.
Source: Revenue/Real Time Credits (edit: sorry, I am not allowed to post links)

I am concerned however that if I do go down the real time route, that I will miss out on some of the money because there isn't enough time left in the year (I will not earn enough to owe enough tax, or my tax credit will run out, etc, I have absolutely zero idea how the calculation works).

So my first question is, is it possible for me to miss out on some of this claim if I try to claim in real time?

Also, could someone explain to me exactly how to calculate how much I would get each week. Some figures are, my Annual Tax Credit is €3,750 and my Annual Cutoff is €42,000. My cumulatives (year-to-date) are €10,885 Gross Earnings and €20,192 Cutoff. If more figures are needed please let me know.

I would really appreciate any help on this
 
If you earned 10,885 during Jan to June, that means an annual gross of about 21-22k?

I will presume that 10,885 is six months wages.

The income tax due on 21,770k is as follows:

(21,770) (0.20) = 4,354 less tax credits of 3750 = 604 tax due for the year.


As your earnings are low, your income tax bill is very low, at about 600 euro.

You can only get tax relief if you pay income tax.

20% tax relief on medical expenses of 3325 is 665, as you say, but that presumes that somebody is paying at least 665 in income tax.
 
Hi, thanks for the reply

My income from Jan to June is so low because I was a student only working part time.
Now I have started an internship as part of my degree and I will be getting a full wage until the end of the year.
My income is 30k per year pro rata, each week I get paid €576 before tax, after the tax I get to keep €502 every week.
My year-to-date cumulative Tax Credit so far is €1802.
Every week I pay: €43 income tax, €8 USC and €23 PRSI

The way I see it is, that to get returned the €665 over the next five months, each week I would have pay ~€30 less in tax, and instead this money would have to go to me, which is theoretically possible because there is room for this in my weekly wage (I pay €43 in income tax and would have to pay €30 less out of this, ie €13 every week). But this would mean each week I would be paying €44 in tax out of my entire €576 wage, is that even possible? It feels illegal to be paying such little tax :p!

So going off your calculation above the way I see it is:
This year, before tax, I am yet to earn (30k)(5/12) = 12.5k
Income tax = (12.5k)(0.2) less tax credits of (€3750-€1802) = €552 tax due before the year ends

When calculating this way it looks like I won't owe enough tax to be able to be paid back the Health Expenses.

Which is it? Is this discrepancy because I am roughly rounding off the number of weeks left in the year and also rounding off the cents?

I am also confused by your calculation, why are you using my entire year's salary when we are already halfway through the year (I use 5 months remaining in my calculations). Shouldn't my tax due for the year be about half of this? (let's say your assumption about my income was correct)

Many thanks for taking the time out to help me @Protocol
 
If your earnings will rise for the rest of the year, and as a result your income tax liability will also rise, then it is likely that you will be able to reclaim the full 665.

The next question is: can you get the tax relief during the year, or after the end of the year? I don't know much about that, sorry.
 
Have you read this?

How to make a Real Time Credit claim

This page outlines how to make a Real Time Credit claim
www.revenue.ie www.revenue.ie

How to make a Real Time Credit claim​

You can make a real time claim once you have incurred qualifying expenditure. A readable image of each receipt must be uploaded to the Receipts Tracker. The Receipts Tracker is in the 'PAYE Services' and 'Manage My Record' sections on myAccount.

You will need to provide details of the date the expense was paid and the amount paid by you. You may need to supply additional information when claiming for certain credits or reliefs, for example:

  • the name and Personal Public Service Number (PPSN) of the nursing home resident, if you pay the fees
  • or
  • a Med 2 Form completed by your dental practitioner for non-routine dental procedures.
In the Receipts Tracker:

  1. Select ‘Add new receipt’.
  2. Input the date the expense was paid.
  3. Select a category and a sub-category from the list provided.
  4. Input the amount of expenses you paid.
  5. Confirm if you have received a reimbursement from a third party, where relevant.
  6. Upload your receipt, follow the instructions and select ‘Add receipt’ on the bottom of the page.
  7. Follow any further prompts.
  8. Sign and submit by entering your myAccount password.
Sign in to myAccount

Refunds and reimbursements from third parties​

You may be entitled to, or may have received, a refund or reimbursement from a third party toward your expenditure from:

If you received a refund or reimbursement, or are entitled to either, you must:

  • choose ‘Yes’ when asked if you received a refund or reimbursement
  • and
  • enter the amount reimbursed or due to be reimbursed to you.
This amount will be automatically deducted from the expense before you make your claim for Real Time Credits. You cannot complete your claim until you confirm the amount of refund or reimbursement you have received.

You cannot claim relief for the amount of any refund or reimbursement of your expenditure that you have, or are due, to receive.

If the refund or reimbursement covers several expense claims, the amount should be apportioned between each relevant claim.
 
igesio said:
The way I see it is, that to get returned the €665 over the next five months, each week I would have pay ~€30 less in tax, and instead this money would have to go to me, which is theoretically possible because there is room for this in my weekly wage (I pay €43 in income tax and would have to pay €30 less out of this, ie €13 every week). But this would mean each week I would be paying €44 in tax out of my entire €576 wage, is that even possible? It feels illegal to be paying such little tax :p!
Click to expand...

Ireland has very low taxes on low earnings.

My parents earn about 50k, and pay 10%.
 
Yes I have read this page on Revenue, however they are not open about all the calculations that come into part of this (Real Time Claiming) so that's why I had a few questions for the forum.

In fact this was the entire point of the thread, I thought that if I just try to claim the lump sum at the end of the year, I would be given it whether I work or not? I already paid the €665 in tax and I am entitled to it back regardless, this is how I understand it?

I think I will just claim as a lump sum at the end of the year because it looks like the amount of tax I will owe this year is roughly equal to what I am entitled to, I am on the threshold and god knows what will happen.. this would just be the safer and easy way
 
igesio said:
In fact this was the entire point of the thread, I thought that if I just try to claim the lump sum at the end of the year, I would be given it whether I work or not? I already paid the €665 in tax and I am entitled to it back regardless, this is how I understand it?
Click to expand...

People must pay income tax, in order to get tax relief.

My in-laws don't pay income tax, but they do have medical bills. They can't claim tax relief on medical bills, as they don't pay any income tax in the first place.

How can you get tax back, if you haven't paid any?
 
Protocol said:
People must pay income tax, in order to get tax relief.

My in-laws don't pay income tax, but they do have medical bills. They can't claim tax relief on medical bills, as they don't pay any income tax in the first place.

How can you get tax back, if you haven't paid any?
Click to expand...

Ok, now I understand a lot more and I also understand why you were using my entire annual wage in the calculation earlier.

I want to talk a bit more about this, not because I am trying to argue with you, but because I am interested in justiyfing the mental gymnastics that Revenue are doing.

In the overview it is stated that the whole scheme allows me to claim some of the money back that I spent on medical treatment. I paid for the service, that includes the VAT fee (which the seller pays technically, but really I bear the cost of this because they just put the price up. Also if there was no VAT being paid I am sure I would be entitled to nothing back, because where would it come from?). So that's the payment, I paid for that service and there is tax on that. So that is why I should get money back - to make life easier for those who have health issues. Also, it is not stated that I am getting tax back. They say I am getting money back as relief on Health Expenses. There is no mention of being required to work on that overview page on Revenue.

Obviously if you skip a few pages and read how to claim the money back, it says that the way to do so is to add tax credits. So obviously you must be working to claim it back, that is the reality and now I understand this part.



Why not go ahead and claim now?

I can't see any harm in doing that.
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You are being very vague and I do not understand.

My understanding is that there is 2 ways I can get the money back
1. Tax relief
2. Real time credit claim

Now, I have to make some educated guesses because unfortunately Revenue are not transparent about their process and calculations and a lot of information is being hidden from me.

I think if I go with option 1, then I will get the money back as a lump sum at the end of this year. If I go with option 2, I will get the money continuously in small chunks continuously, and I will have eventually received the entire amount before the year ends.
Could you confirm this for me?

Neither of these options allow me to claim the money back "now" as you say, I still must wait until the end of the year. Although option 2 is quicker, because I would get some of the money back next week, and some the week after, etc, and let's say roughly I would have half the amount returned to me in a few months, instead of waiting until the year end to receive anything at all.

I am wondering if it is possible I will lose money if I go with option 2 instead of option 1? I am concerned that with option 2, there is not enough time (ie tax I am yet to pay) left in this year and I might miss out on some of the claim. Again Revenue are not bejng honest about their calcuations.

Many many thanks
 
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igesio said:
My understanding is that there is 2 ways I can get the money back
1. Tax relief
2. Real time credit claim

Now, I have to make some educated guesses because unfortunately Revenue are not transparent about their process and calculations and a lot of information is being hidden from me.

I think if I go with option 1, then I will get the money back as a lump sum at the end of this year. If I go with option 2, I will get the money continuously in small chunks continuously, and I will have eventually received the entire amount before the year ends.
Could you confirm this for me?

Neither of these options allow me to claim the money back "now" as you say, I still must wait until the end of the year. Although option 2 is quicker, because I would get some of the money back next week, and some the week after, etc, and let's say roughly I would have half the amount returned to me in a few months, instead of waiting until the year end to receive anything at all.
Click to expand...
All above is correct.
 
igesio said:
I am wondering if it is possible I will lose money if I go with option 2 instead of option 1? I am concerned that with option 2, there is not enough time (ie tax I am yet to pay) left in this year and I might miss out on some of the claim. Again Revenue are not bejng honest about their calcuations.

Many many thanks
Click to expand...

No, you can't lose out either way.

If the max tax relief is 665, and you end up paying 600 income tax this year, then either way 1 or 2, the max tax relief you will get is 600.

The only difference, AFAIK, is a timing of cash flows.
 
The way I claimed one year, had a massive med 2 bill for a kid, so I put the claim in and got the refund via additional tax credits immediately.
However I had already paid €15k in tax that year. I claimed in September and had the money back quickly. It spread out over oct-December. As the “refund” is given via the tax credits.

Afaik they adjust the tax credit pdq so you get the money back fairly quickly.

Ordinarily I submit med expenses as part of my tax return in October. It gets processed and any refund is issued straight to my bank account in January. If you have big bills early in the year it makes sense to submit asap. Otherwise there’s a time lag.

Reading about the Real Time, it seems that if I put in a claim now I’d get it back immediately but that because I’ve already paid sufficient tax. It seems you haven’t yet
 
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igesio said:
Ok, now I understand a lot more and I also understand why you were using my entire annual wage in the calculation earlier.

I want to talk a bit more about this, not because I am trying to argue with you, but because I am interested in justiyfing the mental gymnastics that Revenue are doing.

In the overview it is stated that the whole scheme allows me to claim some of the money back that I spent on medical treatment. I paid for the service, that includes the VAT fee (which the seller pays technically, but really I bear the cost of this because they just put the price up. Also if there was no VAT being paid I am sure I would be entitled to nothing back, because where would it come from?). So that's the payment, I paid for that service and there is tax on that. So that is why I should get money back - to make life easier for those who have health issues. Also, it is not stated that I am getting tax back. They say I am getting money back as relief on Health Expenses. There is no mention of being required to work on that overview page on Revenue.

Obviously if you skip a few pages and read how to claim the money back, it says that the way to do so is to add tax credits. So obviously you must be working to claim it back, that is the reality and now I understand this part.




You are being very vague and I do not understand.

My understanding is that there is 2 ways I can get the money back
1. Tax relief
2. Real time credit claim

Now, I have to make some educated guesses because unfortunately Revenue are not transparent about their process and calculations and a lot of information is being hidden from me.

I think if I go with option 1, then I will get the money back as a lump sum at the end of this year. If I go with option 2, I will get the money continuously in small chunks continuously, and I will have eventually received the entire amount before the year ends.
Could you confirm this for me?

Neither of these options allow me to claim the money back "now" as you say, I still must wait until the end of the year. Although option 2 is quicker, because I would get some of the money back next week, and some the week after, etc, and let's say roughly I would have half the amount returned to me in a few months, instead of waiting until the year end to receive anything at all.

I am wondering if it is possible I will lose money if I go with option 2 instead of option 1? I am concerned that with option 2, there is not enough time (ie tax I am yet to pay) left in this year and I might miss out on some of the claim. Again Revenue are not bejng honest about their calcuations.

Many many thanks
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You'll end up in the same position at the end of the year whichever way you go.

If you claim at the end of the year, your tax bill for the year will be reduced by €665. If you paid more than €665, you'll get a refund of €665. If you paid less than €665, you'll get a refund of the tax that you paid.

If you do a real time claim, your credits each week will increase by €12.79 (€665/52). You'll get the benefit of the extra credits from all the weeks up to now the first week. So for example if your claim goes through on week 30 of the year, you'll have extra credits of €12.79*30 = €383.70 that week. If you haven't paid that much tax yet, the extra credits will carry over to the next week and so on. When you get to week 52 of the year, you'll have got the full €665 (or less if you don't pay that much tax) the same as in the end of year claim.

The relief has nothing to do with VAT. Medical treatment is exempt from VAT anyway.
 
Tax relief is given to the person who paid the bill.

Maybe if a friend or relative with a higher tax liability had paid one of the orthodontic bills they could claim the tax relief.
 
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igesio said:
Revenue are not transparent about their process and calculations and a lot of information is being hidden from me.

Revenue are not bejng honest about their calcuations.
Click to expand...

Jaw dropping revelations! How dare those unmentionables in the Revenue Commissioners seek to deprive you of your €665 tax credit! :D

Have you considered complaining to the UN Office for Human Rights about Revenue's despicable chicanery in your case?
 
So in summary for anyone reading; there is literally no difference money wise between claiming tax relief during an active tax year using real time credits and claiming the relief after the tax year has ended by filing a tax return. One way you pay less income tax through the year and the other, you get a lump sum refund after the tax year end. The money value to you is the exact same.
Both of those positions need the claimant to actually be paying income tax year in the year the expenses were incurred. It's a general condition of claims; no income tax paid means no income tax available to refund.
 
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