Information Circular No 1/2017: Home Carers Tax Credit

By Industrial Relations Officer

A Home Carer’s Tax Credit is a tax credit given to married couples or civil partners (who are jointly assessed for tax) where one spouse or civil partner works in the home caring for a dependent person.

It was announced in Budget 2017 that the Home Carer’s Tax Credit given to married couples or civil partners where one spouse or civil partner works in the home caring for a dependent person will increase from €1,000 to €1,100 in 2017.  The home carer’s income threshold is €7,200.  If the home carer has income in his or her own right, the tax credit is reduced by one-half of the amount of income that exceeds €7,200.

A Home Carer’s Tax Credit can be claimed when:

  • The married couple or civil partners are jointly assessed for tax
  • One spouse or civil partner works in the home caring for one or more dependent people
  • The home carer’s own income is below €7,200 in the tax year you are claiming for

You can claim a reduced credit if the carer’s income is between €7,200 and €9,400 in 2017.  Carer’s Allowance is NOT taken into account when determining the home carer’s income but it is a taxable source of income. This means that if you are claiming Carer’s Allowance, it will make up part of your jointly-assessed income.

A Dependent Person is a:

  • Child for whom Child Benefit is payable
  • Person aged 65 or over
  • Person with a disability who requires care

A dependent person you are caring for cannot be a spouse or civil partner.  They can however, be a relative by marriage, or someone for whom you act as a legal guardian.  The dependent person normally has to live with you and your spouse or civil partner in the tax year in order to qualify for Home Carer’s Tax Credit.

A dependent person who is a relative can be cared for outside your home.  However, if the person is not living with you they must live next door in a neighbouring residence, or on the same property, or within 2 km of your home.  In addition, there must be a direct communication link between you (for example, a telephone line or alarm system) and the dependent person being cared for.

Further information on the Home Carer Tax Credit can be found by:

  • Accessing the Revenue website          http://www.revenue.ie/en/tax/it/leaflets/it66.html
  • Accessing the Citizens Information website              http://www.citizensinformation.ie
  • Contacting your local Revenue/District Office on their Lo Call 1890 telephone numbers.

 

Issued on the 23/01/2017

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