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.
The tax you are liable to pay is calculated as a percentage of your income. A tax credit is deducted from this to give the actual amount of tax that you have to pay. A tax credit has the effect of reducing your payable tax by the amount of the credit.
Budget 2012: There will be no changes to personal tax
credits in 2012.
A Home Carer’s Tax Credit can be claimed when:
You can claim a reduced credit if the carer's income is between €5,080 and €6,700 in 2011.
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:
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 quality 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).
Home Carer’s Tax Credit for 2011 is €810. If the home carer earns between €5,080 and €6,700, a reduced tax credit is paid. If the home carer earns €6,700 or more for a tax year, then you cannot claim the Home Carer’s Tax Credit.
Reduced tax credit
The tax credit is reduced by one half of the income of the home carer that exceeds this limit.
Example for 2011A home carer with an annual income of €6,000 will not qualify for a full Home Carer's Tax Credit but will qualify for a reduced tax credit.
The difference between the actual income (€6,000) and €5,080 is calculated and then halved. The top-rate of Home Carer's Tax Credit is then reduced by that amount.
€6,000 - €5,080 = €920 ÷ 2 = €460
€810 - €460 = €350 (reduced Home Carer's Tax Credit).
Youcannot claim the Standard Rate Cut-Off Point for dual income couples and the Home Carer’s Tax Credit. Your local tax office will help you to determine which is better for you.
You can claim Home Carer's Tax Credit by contacting Revenue by telephone or using PAYE On-line service.
You can also complete Home Carer’s Tax Credit IT 66 claim form (pdf).
Applications for the Home Carer's Tax Credit should be made to Revenue.
Alternatively, you may text the words 'Info Credit Home Carer' to 51829 to Revenue for instructions by text message on how to claim a Home Carer's Tax Credit.