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Married Tax Credits: Everything You Need To Know

April 20, 2020

I’ve just gotten married, what next?

If you get married, both you and your spouse continue to be treated as single people for tax purposes in that year. If, however, the tax you pay as two single people is greater than the tax that would be payable if you were taxed as a married couple, you can claim a tax refund of the difference.

Refunds are only due from the date of marriage and will be calculated after the end of the year. So, for example, if you get married in 2020, any tax refund due to you will be calculated after 31 December 2020. Revenue do not automatically issue these refunds either. The refund due as a result of a ‘year of marriage review’ has to be manually calculated.

Refunds are normally only due where a couple are taxed at different rates and one spouse could benefit from the unused standard rate cut-off point or for some of the unused tax credits of the other spouse.

The year after you get married, you have 3 options as to how you wish to be taxed.

 

What are the tax assessment options for married couples?

 Joint Assessment

Joint assessment is the option that benefits most couples. Under joint assessment you are chargeable to tax on your combined income as a couple.

Joint assessment allows you to allocate (transfer between you) most of your tax credits, reliefs and rate band with your spouse. The tax rates, bands and reliefs that apply to you depends on if one or both of you have an income.

You cannot transfer:

  • The Employee Tax Credit
  • Employment expenses
  • The increase in the standard rate band

Joint assessment also gives you the benefit of being entitled to claim the Home Carer Tax Credit, if either you or your spouse stays at home to care for your children.

Separate Assessment

If you are separately assessed, you and your spouse or civil partner are taxed as single people during the year.

The following tax credits, if you are claiming them, are divided equally between you:

  • Married Tax Credit
  • Age Tax Credit
  • Blind Tax Credit
  • Incapacitated Child Tax Credit

Any unused tax credits, reliefs and rate bands can be transferred between each spouse. This is the same as joint assessment. For this reason you cannot transfer:

The amount of unused rate band you can claim is limited. It cannot exceed the standard rate band available to a jointly assessed couple.

Separate Treatment

Under separate treatment, you and your spouse or civil partner, are taxed as if you were not married or in a civil partnership. Separate treatment can be referred to as ‘single assessment’. You and your spouse:

  • are taxed on your own income only
  • get tax credits and the standard rate band due to a single person
  • pay your own tax
  • complete your own tax returns separately
  • claim your own tax credits

You cannot transfer your unused tax credits, reliefs and rate bands to your spouse. This is the main difference between separate treatment and separate assessment.

You cannot claim the Home Carer Tax Credit if you are assessed under separate treatment.

Separate treatment may not be the best choice for you. It may result in you paying more tax as a couple than you would with separate assessment or joint assessment. This will happen if either of you do not earn enough to use all your personal tax credits, reliefs or rate bands.

 

Am I better off being tax as a married person?

In some situations, yes. In others, there will be no difference.

As previously mentioned, refunds are normally only due where a couple are taxed at different rates and one spouse could benefit from the unused standard rate cut-off point or for some of the unused tax credits of the other spouse.

This generally means that if each spouse earns over €35,300 in a year, there will be no unused tax credits or rate band to be transferred to the other spouse.

Example

If Alan earns €30,000 and their partner (Susan) earns €45,000, Alan will have an unused rate band of €5,300 that can be transferred to Susan. The increase in Susan’s rate band will lead to a tax refund of €1,060 (i.e. 20% of the transferred rate band).

 

How do I claim my Married Tax Credits?

Doing your taxes as a newly married couple can be a prolonged and intimidating process to say the least. At MyTaxRebate, we are here to make this process as quick and easy for you as possible.

To claim your Married Tax Credits, just fill in our Full Review Form. This form will provide us with the details necessary to claim your Married Tax Credits (including the ‘year of marriage credit’), along with any additional tax credits you might be due for the last 4 years.

Alternatively, you can fill out our Quick Review Form, and contact us upon completion informing us of the tax credit(s) you are looking to claim.

If you are not entitled to Married Tax Credits, but would still like us to review your taxes, just complete our 50-second Quick Review Form.