Dáil Éireann Debate, Wednesday - 31 May 2023
41. Deputy Alan Dillon asked the Minister for Finance if he will provide details on how tax credits can be claimed for a married couple, unmarried couple and an individual; and if he will make a statement on the matter. [26753/23]
View answerI am advised by Revenue that the Tax Code sets out the basis on which an individual is assessed to tax and provides for a significant number of credits, reliefs and exemptions, eligibility for which is subject to a wide range of conditions. The basis of assessment and the credits, reliefs and exemptions available vary depending on the facts and circumstances applicable in each specific case.
Basis of Assessment
Broadly there are three basis of assessment – joint assessment, separate assessment and separate treatment/single assessment. Married couples or civil partners who live together can elect, except in the year of marriage, for one of the three basis of assessment set out below. An unmarried person will be assessed under the single basis of assessment.
Assessment of married couple or civil partners who live together
Parts 44 and 44A of the Taxes Consolidation Act 1997 (TCA 1997) provide for the assessment of a married couple or civil partners who live together. Where joint assessment applies tax is chargeable on the combined total income and a single tax return is filed. Transfer of tax credits between the couple may be permitted in respect of some but not all credits.
Separate assessment is a form of joint assessment however each spouse or civil partner files their own return. If a married couple or civil partners who live together elect for this treatment, they are treated as if they are not married or in a civil partnership for tax purposes but may transfer unused tax credits (similar to joint assessment). A married couple or civil partners who live together may choose whichever basis of assessment is most beneficial to them, based on their personal circumstances.
Separate treatment, which is sometimes referred to as single assessment, applies where each individual is assessed to tax as if they were not married or in a civil partnership. As such, no transfer of tax credits is permitted between the couple.
Assessment of unmarried couple/couple not in a civil partnership/single individual
An unmarried couple, a couple not in a civil partnership, and single individuals are taxed under the single basis of assessment. Where the single basis of assessment applies an individual is taxed on their own income only and there is no combining of incomes or reliefs with another individual.
Tax Credits, Reliefs and Exemptions
Part 15 of the TCA 1997 provides for a wide range of tax credits, reliefs and exemptions. Whether or not such credits, reliefs and exemptions are available to an individual or couple depends on the circumstances of the specific case and the eligibility criteria for the individual credit, relief or exemption.
One such credit is the basic personal tax credit, which is provided for in section 461 of the TCA 1997. For the 2023 year of assessment, the basic personal tax credit is valued at €1,775 per person. In the case of a married couple or civil partnership, each spouse or civil partner will be entitled to his or her own basic personal tax credit of €1,775. Again, this is the case irrespective of whether the couple has one or two incomes.
Claim for Tax Credits
Claims for tax credits can be made through Revenue’s ‘My Account’ facility if a PAYE customer or by filing an annual Income Tax Return. Detailed information regarding the range of tax credits available, including the claims process can be found on Revenue’s website.
