Over 60,000 families could be missing out on a sizeable tax rebate that could be a big boost for household finances this summer.
No one's a fan of paying tax but it seems a whole lot of people who work in the home could be making things extra hard for themselves.
According to the tax experts at taxback.com, over 60,000 families in Ireland are missing out on the Home Carer Credit which could result in a tax rebate of up to €4,100 over four years for people who have yet to claim it.
The tax credit currently stands at €1,500 per year, having been increased by €300 in last year's budget, and can be claimed by any married couple or civil partnership where at least one of the spouses is a stay-at-home carer for a dependant, including persons under 18.
Bringing this to the attention of those people has been a tough task for Eileen Devereux, Commercial Director at taxback.com.
“Two years ago, we shone a light on this issue in the press and the feedback was strong. In that year the numbers claiming the credit rose by 5,000. However, there is still a gulf between the number of households entitled to the credit and those actually claiming it, so we think now is as good a time as any to revisit our campaign to spread the word in the hope that it might prompt more people to claim this year.”
“According to Revenue, tax returns in 2016 indicate a total of 85,900 people claimed the credit at a cost to the exchequer of €77.9m – which is an average of €906 each. Given that Revenue treats taxpayers as units this means a total of 85,900 families claimed the credit."
"If we contrast this with the estimated 146,698 households with children where one parent is looking after the home, it appears that only about 59% of families are claiming their entitlement, which is not surprising when you consider the number of people that are aware of its existence."
A means to affordable childcare?
One of the most common criticisms of the current Government is its failure to facilitate affordable childcare, yet this credit could be a big relief to those families.
As well as giving a tax credit of €1,500 to anyone who looks after their children in the home, it also allows the stay-at-home partner to work up to a limit of €7,200 a year, according to Eileen. The credit is then reduced for earnings above this amount.
"Given the current burden of childcare costs for many families, the tax credit could be a factor for any couple considering becoming a one-income household" says Eileen.
Trying to get taxpayers' attention
Perhaps the most surprising thing about this tax credit is the difficulty in bringing it to the public's attention and adequately informing them what it means.
“Revenue has made a concerted effort to inform taxpayers of this entitlement and proactively suggest this to suitable people on their systems. They do look out for married/civil partnership and one income families with children, but despite their best efforts, our anecdotal data suggest that this credit is at best misunderstood and frequently unknown.”
So now that you know about the relief available, make sure you take advantage of it if it applies to you! You can claim your refund online through myaccount, Revenue's online system, and you claim a refund for the last four years.
While you're applying for your tax refund, it could also be a good time to save some money on your bills. Take the bonkers.ie Switching Challenge today and save up to €5,000 on your household bills.