Do you make maintenance payments to a former partner?
If you are making ‘legally enforceable maintenance payments’ to a ‘former partner’, you may be entitled to tax relief on these payments.
The relief is granted to you at your highest rate of tax. So, if you are paying tax at 40%, you are entitled to tax relief at the 40% rate.
Any maintenance payments you make are also exempt from the Universal Social Charge (USC). Again, the rate at which you pay USC will depend on your income. The higher the rate you pay USC at, the higher the rate of relief will be.
Example:
Liam earns €50,000 a year and he is making legally enforceable maintenance payments to his former partner of €10,000 each year. As he is paying tax at 40%, he is entitled to a PAYE refund of €4,000. He is also paying USC at the 4.5% rate. This allows his to claim an additional USC refund of €450. Overall, while he is making payments of €10,000, he is entitled to claim €4,450 back in tax.
Who is eligible for tax relief on maintenance payments?
To be eligible to claim tax relief on maintenance payments, you must meet the criteria of making a ‘legally enforceable maintenance payment’ and it must be to a ‘former partner’.
Claim Tax Back On Your Maintenance Payments Today!
A former partner refers to a:
separated or former spouse or civil partner, or
former cohabitant who you lived with for:
two or more years, where you have children together
five or more years, where you have no children together.
Legally enforceable maintenance payments are:
payments you make to a former partner under:
a court order
a deed of separation
any other legal commitment (such as a covenant).
periodic (annual, monthly, weekly i.e. they cannot be once off payments).
You may also be legally required to regularly pay an amount on behalf of your former partner, such as a mortgage payment. This is treated as a legally enforceable maintenance payment to your former partner on which tax relief can be claimed.
Who isn’t eligible to claim the tax credit?
If the payment does not meet the criteria above, it will be treated as a voluntary maintenance payment and you will not be entitled to tax relief on them.
You can only claim tax relief on the amount you have paid for the benefit of your former partner. You cannot claim tax relief for any amount of a maintenance payment made for the benefit of your children.
A maintenance order, which is ordered and enforced by a court of law, can be awarded for the benefit of your:
former spouse or civil partner, and/or
child or children.
These court orders generally give a breakdown of the maintenance payments attributable to your former partner and then to any children.
Maintenance payments for the benefit of your children are ignored for income tax purposes. As such, you cannot claim tax relief for these payments.
How do I claim tax relief on Maintenance Payments?
To claim tax relief on Maintenance Payments, just fill in our Full Review Form. This form will provide us with the details necessary to claim tax relief on Maintenance Payments, along with any additional tax credits you might be due for the last 4 years.
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