Tax back after receiving Redundancy payment?

L

LittleAcorns

Guest
Hi just looking for some advice, was recently made redundant and received payment, paid a substantial amount of tax! Sent the breakdown of the payment to the Revenue Commissioners, however, they are unable to give me the details of actually how much of the tax I paid is refundable to me? Any thoughts? Thanks
 
Presumably, they can't do that until the end of the year, when your total income for the year becomes apparent. I received a tax rebate earlier this year after being made redundant in 2008. I think it was a Form 12 I submitted.
 
You have to apply for Top Slicing Relief (Average tax paid over the last 3 years will be applied to the redundancy package excl statutory)

Also don't forget to apply to welfare to reclaim excess of PRSI. AFAIA redundancy payments, payments in lieu of notice, golden handshakes etc are not liable to PRSI. You may have to pay the health levy.

Additional info
 
We're working on a Redundancy payments tax calculator, which looks at Statutory, Revenue exempt amounts and Top Slicing Relief. You might find this useful in looking at your tax on the redundancy payment.
It's still in beta test, so feedback is appreciated.
 
Redjohnno,

It would be worth inserting the calculation of health levy and income levy due on taxable element of a redundancy package.

These can be quite substantial (up to 11% combined)

Cully
 
Very good Point Cully. Have to look into that.
Just to point out that these are only chargeable on the taxable portion of the Redundancy package and not the statutory or revenue exempt portions. We've a brief Redundancy and Tax overview that might help visualise that.

also Cully, you might be due a partial rebate for health levy and income levy paid - you should check that out with your own package
 
Hi I am being made reduntand on the 17th of december. I was wondering will i be elligable to claim back tax for the year? Somebody told me that you have to be out of work 4 wks first. But this would mean it would be janurary then and that would be a new tax year. Any info would be great.

Thanks In Advance..
 
Hi shels-07,
You are in a slightly different situation as you are being made redundant within 4 weeks of the end of the year.

You will not be making a refund claim on being made redundant, but will be making a normal end of year assessment of your taxes.

This is different. normally, if you are made redundant before the end of year, you wait 4 weeks and can then start claiming unused tax credits (for those 4 weeks and any more for how long they took to process the claim).

That close to the end of the year, you may not have unused tax credits (you may have received all your december tax credits) but you can claim for your medical expenses and any other income deductions and missing tax credits.
 
That gets me curious, if a person is made reduntant on 31st December having used all their tax credits etc but does not actually receive the severance payment until say the 5th of January or later then what is the tax situation, is it payable per the individuals tax situation that applies on 31/12/09 or from January 2010 when the actual payment will be received ..? The significance is that in 2010 there will be tax changes which one can anticipate from Budget '09 in December...? thoughts on this .?
 
Hi Palerider,
I'm pretty sure it's the redundancy date that matters - the date of the payment of the redundancy does not affect the tax year it's accounted for in.
but don't see that specifically written in any Revenue materials, if anyone has a link...
 
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