Marriage tax benefits – an overview of your options, deadlines and what you need to do
Now is the time of year that many couples will be tying the knot. According to cso.ie, July and August are the most popular months for opposite sex marriages in Ireland with September being the most popular month for same sex marriages. With this change in personal circumstances, many couples should and will be looking into marriage tax benefits and the tax options available to them in the coming months. To help married couples and registered civil partners maximise their entitlements we have summarised some of the key information below.
Since 2011, registered civil partners and married couples are taxed the same way.
What to do once married?
Complete either an Assessable Spouse Election Form or Nominated Civil Partner’s Election Form (whichever is appropriate to you) and send it to Revenue to start the process to receiving your marriage tax benefits. You can find your local Revenue office here. Before completing this form, however, you’ll have to decide which of 3 tax options to opt for, i.e. joint assessment, separate assessment or separate treatment.
What is joint assessment?
This is the option that’s generally most favourable for most couples as your tax credits and rate band can be split between you and your partner. The allocation of tax credits can be done through your myAccount.
You should choose the assessable individual (this person will be responsible for filing tax returns and paying any tax that’s due) in the relationship when completing the Assessable Spouse Election Form or Nominated Civil Partner’s Election Form. If you don’t choose an assessable person Revenue will nominate the individual with the highest income.
The deadline for informing Revenue that you’re selecting this option is March 31st in your assessment year.
What is separate assessment?
Separate assessment is the option where both individuals in the relationship are taxed as single people. Some key points to note are:
- Some tax credits are divided equally between both individuals (specifically, Married or Civil Partner's Tax Credit, Incapacitated Child Tax Credit, Blind Tax Credit and Age Tax Credit).
- You can claim any credits or rate band that your partner didn’t use after Dec 31.
- If you believe that you have unused tax credits or rate band you can contact your local tax office for a review after the end of the year.
- Overall, the tax you pay under separate assessment is the same as the tax you would pay on joint assessment.
- If you want to choose this option you must inform Revenue between Oct 1 (previous year) and March 31 (application year).
What is separate treatment?
Separate treatment is the option where you will receive the same tax credits and rate band as a single person. Crucially, you cannot claim any tax credits or rate band that your partner didn’t use. If you want to choose this option you must inform Revenue within the year that you want this option to apply.
What happens next?
Once your application has been processed by Revenue, you’ll be taxed as a single person for the year in which you’ve gotten married. However if you’ve paid more tax than you would have as part of a couple you can claim the difference back at the start of the next year.
For subsequent years you'll receive your marriage tax benefits, your tax will be calculated based on the tax option (i.e. joint assessment, separate assessment or separate treatment) that you opted for.
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