A married couple, jointly assessed, each with less than 5k in unearned income in a given year. When added together however they will have just over 5k. Does that remain within the scope of a form 12, or is one of the couple required to register with ROS and complete a form 11?
Unearned Income, Form 11 or 12?
- Thread starter nest egg
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"When a married couple opts for joint assessment, they are treated as a *single entity* for tax purposes.
This means that both their incomes are combined, and they benefit from shared tax credits and reliefs.
Filing Requirements
Form 12: This form is typically used by individuals whose main source of income is from PAYE (Pay As You Earn) employment or pensions. If both spouses have unearned income of less than €5,000 each, they can file Form 12 jointly, provided their total unearned income does not exceed €5,000.
Form 11: If their combined unearned income exceeds €5,000, they must file Form 11. This requirement holds even if each spouse's individual unearned income is below the threshold but collectively exceeds €5,000.
Form 11 is required for self-assessment and is necessary for individuals with significant non-PAYE income.
Summary of Conditions
Both Spouses Below €5,000: If each spouse has less than €5,000 in unearned income and their combined total remains below €5,000, they can use Form 12.
Combined Income Exceeds €5,000: If their combined unearned income exceeds €5,000, one or both spouses will need to register with ROS (Revenue Online Service) and complete Form 11."
This means that both their incomes are combined, and they benefit from shared tax credits and reliefs.
Filing Requirements
Form 12: This form is typically used by individuals whose main source of income is from PAYE (Pay As You Earn) employment or pensions. If both spouses have unearned income of less than €5,000 each, they can file Form 12 jointly, provided their total unearned income does not exceed €5,000.
Form 11: If their combined unearned income exceeds €5,000, they must file Form 11. This requirement holds even if each spouse's individual unearned income is below the threshold but collectively exceeds €5,000.
Form 11 is required for self-assessment and is necessary for individuals with significant non-PAYE income.
Summary of Conditions
Both Spouses Below €5,000: If each spouse has less than €5,000 in unearned income and their combined total remains below €5,000, they can use Form 12.
Combined Income Exceeds €5,000: If their combined unearned income exceeds €5,000, one or both spouses will need to register with ROS (Revenue Online Service) and complete Form 11."
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Thank you. In this case, it makes the case to be separately assessed (providing both individuals are higher rate tax payers and there is no advantage to sharing credits etc).
Interestingly, although the above is the official position, form 12 will not block returns with more than €5000 in unearned income. I'm unexpectedly slightly over and waiting to see what happens with my submitted form 12. I'm surprised the limit is not index linked.
Laughahalla
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Did anything come of this? Same situation, form 12 allowed a figure over 5000 to be entered - Jointly assessed. If it is not 5k per person then would you be better off not being jointly assessed?
My 2023 form 12 with slightly more than €5000 non-PAYE income was accepted and refund processed, with no comment.
Expect I may be "invited" to submit a form 11 for 2024.
If I was a company director, I expect Revenue would have insisted on a form 11 for 2023, regardless. It might also have been that I did it near the deadline; they'd rather an on-time return rather than insist I delay to register for self-assessment and possibly incur a late filing penalty.
Expect I may be "invited" to submit a form 11 for 2024.
If I was a company director, I expect Revenue would have insisted on a form 11 for 2023, regardless. It might also have been that I did it near the deadline; they'd rather an on-time return rather than insist I delay to register for self-assessment and possibly incur a late filing penalty.
There is no discretion on the €5,000 limit, you can't be slightly over. If you have €5,001 of unearned income the onus is on you to register for self-assessment regardless of Form 12 accepting the amount.
You are also liable for PRSI on the full amount of unearned income, which Form 12 users are exempt from.
You are also liable for PRSI on the full amount of unearned income, which Form 12 users are exempt from.
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Yes, I didn't realize until I'd totted up my unearned income figures that I was over the limit, by which point it was too late to register for self assessment (or indeed to pay preliminary tax!). It was partially due to a 2 year high interest account paying out all interest in 2023.
I agree the legal requirements are clear, but there obviously is some discretion on the Revenue side in reality. Although nobody should plan on this basis.
I asked earlier in the thread why the limit is not index-linked. It turns out it has been increased in the past, and that's probably due again.
I agree the legal requirements are clear, but there obviously is some discretion on the Revenue side in reality. Although nobody should plan on this basis.
I asked earlier in the thread why the limit is not index-linked. It turns out it has been increased in the past, and that's probably due again.
Swing and roundabouts, the net position is that Revenue still owe me money for 2023. And that's before working from home allowances, which aren't worth my time documenting and calculating to claim.
@MugsGame
This was the response I received from Revenue. I haven't found where to add to Form 12, so haven't proceeded yet. Have filled the TR1, but not sure if it will be dealt with by Dec 31st.
"If your net Non-PAYE income in 2024 exceeds €5,000 you should still input it on your 2024 PAYE return as you have not registered for Self Assessed Tax for 2024.
If you register for Self Assessed Tax for 2024 by the 31st December 2024 you will complete your Tax Return through ROS. I have attached a TR Form for completion to register.
The completed form should be return via a MyEnquiry to our Income Tax Department.
It is important when you are completing your returns that you provide documents from the relevant Tax Authorities confirming any tax you have already paid on foreign income to avoid double taxation".
I hope that is helpful. At the moment, I am waiting to see if any response arrived into My enquiries before 31st December. I have health and flat rate expenses added, but didn't go forward with claim as couldn't find where to add interest earned (last year it was added as Income).
If anyone has a screenshot of where the amount of interest earned should go on both systems PAYE 12 and PAYE 11, I'd appreciate that. Thank you in advance.
You’re making an assumption that the OP is liable for PRSI and accordingly has underpaid. There is nothing in the thread to indicate that the OP has such a liability.
Since they mentioned working from home it is very likely they are under 70 and are liable for PRSI.
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Great edit, huge improvement on your previous strawman attack.
They may or may not be liable to PRSI. Your statement contains certainty that is inappropriate.
Anyway, Ignore activated.
This publication by Citizens Advice is very poor.
Reading this a person would conclude that any person with unearned income will be liable to Prsi class K and receive no benefits.
This is totally inaccurate, many categories of people with unearned income are liable to Prsi class S and are entitled to benefits.
If this is the best effort by Citizens Advice to decipher our ultra complicated Prsi system, it is totally unreasonable to expect the ordinary citizen to figure it out.
Reading this a person would conclude that any person with unearned income will be liable to Prsi class K and receive no benefits.
This is totally inaccurate, many categories of people with unearned income are liable to Prsi class S and are entitled to benefits.
If this is the best effort by Citizens Advice to decipher our ultra complicated Prsi system, it is totally unreasonable to expect the ordinary citizen to figure it out.
Why not try to contact them to correct what you think is incorrect? I would but I don't know what the issue is here...
The issue is....
Any person whose only income is unearned and over 5k, pays class S.
Self employed people who are liable to class S, pay class S on unearned income.
Certain ARF holders pay class S on unearned income.
Class A PAYE employees with some extra self employment income will pay class S on unearned income, if their combined self employment income and unearned income is over 5k.
In all cases this applies to people up to age 66 (or up to age 70 for people who have not claimed the Contributory pension)
It doesn't say if you pay class K contributions you are entitled to no benefits. It says you aren't entitled to any benefits from those class K contributions.
If you are normally taxed under PAYE but you have unearned income more than €5,000 then you are liable to PRSI class K on that income, if you are over 16 and under 70.
*employed contributors and occupational pensioners whose only additional income is unearned may be liable for PRSI contributions on this income.
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The key word here is only.
If they also have any earned self employment income they are class S on their unearned income.
You, like Citizens Advice, might be struggling to
figure out our ultra complicated Prsi system.
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