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Dependent Relative Tax Credit

Dependent Relative Tax Credit

Changes for 2021 mean this Tax Credit is worth up to €1,225 a year

 

We think the Dependent Relative Tax Credit is the most underclaimed tax credit and one of the least understood tax credits aimed at PAYE employees.

One of the reasons for this is that there are restrictions that complicate it.  Plus it looked like a relatively small tax credit, with a headline number of €70.

But changes in the Budget have meant that from 2021 this Tax Credit could be worth up to €1,225 to you each year.  Interested in Finding out more?  Read on!

 

Claim Amounts

The amount that can be claimed per year are  outlined below

 

 

 

 

 

Criteria

The Dependent Relative Tax Credit is available if you maintain a relative at your own expense. You can claim for your relative, or a relative of your spouse or civil partner. If your relative is living abroad then you can still claim, but if you are claiming for your child they must live with you in Ireland.

What does maintain mean in the context of this tax credit?

Maintaining covers part time assistance and financial support.

It is not dependent on you living with the person – for that matter it is not dependent on the person you are providing support for living in the country.

In practical terms, maintaining will probably involve activities such as doing shopping trips, helping with the housework or garden, or helping with the bills.

 

Who can be classed as a Dependent Relative?

There are 3 main categories of Dependent Relative that you can claim for.

Relative – To qualify your relative must be unable to maintain themselves due to incapacity by old age or infirmity.
Widowed Parent – Qualify whether incapacitated or not.
Child – Qualify if they live with you and you are dependent on them due to your old age or infirmity.
You will not be eligible for the tax credit if your dependent relative’s total income exceeds €15,060 (including social welfare, pension or deposit interest income).

The Dependent Relative Tax Credit is worth €70 for each of the last 4 years 2016 to 2019 where eligible.

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