Single Parent Tax Credit Laid Bare
Not many tax changes in Budget 2014 – for most of us our payslips in January 2014 will be the same as they were in December 2013.
But a big change has been implemented to the Single Parent Tax Credit. Let’s remind ourselves of the status quo for single parents and how that will change.
Are you Eligible? The Story 2009 – 2013
In Brief: The One Parent (or Single Parent) Tax Credit is available if you are a parent not living with a partner and your child lives with you at least part of the year.
Some notes on eligibility:
- A Child is considered to be someone under 18, or if over 18 they must be in full time education
- If you are co-habiting with anyone, not just the parent of the child, you are not considered a single parent
- How long is ‘part of the year’? The Child only has to stay with you in your home one night of the year to meet this criteria.
Blokes missing out: 2009 -2013
What happens in practice with the One Parent Tax Credit? It is complicated, so we always have a personal consultation with our clients to make sure they are eligible before claiming. But here are some observations.
- Women are pretty clued into this and tend to have this added as a tax credit.
- Men miss out on this quite a bit. And in a lot of cases are really uncomfortable with the idea of claiming it – mostly out of concern that it will in some way affect the mother of the child.
- A man claiming the One Parent Tax Credit does not affect the mothers eligibility to either Social Welfare parents or extra tax credits. It can be worth up to €2,000 a year, so stop missing out!
The Rule Change – 2014 onwards
From 2014 onwards, the rules change: only one parent can claim the One Parent Tax Credit and that is the person deemed the Primary Carer.
So if you are looking after the child 5 days a week and the other parent does 2 days a week, you would expect that you will be deemed the primary carer and get to keep the tax credit.
But in practice, Revenue are not going to go around asking people for this information. We expect what they will do in practice is maintain the One Parent Family Tax Credit for those who receive Child Benefit and cease it for those who do not receive Child Benefit.
For any one who does receive the One Parent Tax Credit currently we do say make sure you double check your Tax Credit Certificate for 2014 (which is usually sent our late November /early December). And make sure that it is correctly cancelled – or correctly maintained – whichever is the case.
Don’t forget that if you were due the Single Parent Tax Credit for any year 2009 through 2013, you can still claim this now – call us now on 05991 73300 or text “Refund” to 50015 to talk to a tax refund team member.