A Home Carer Tax Credit is a tax credit given to married couples or civil partners (who are jointly assessed for tax) where one spouse or civil partner works in the home caring for a dependent person.
The tax you are liable to pay is calculated as a percentage of your income. A tax credit is deducted from this to give the actual amount of tax that you have to pay. A tax credit has the effect of reducing your payable tax by the amount of the credit.
Read more information on how your tax is calculated.
Rules
A full Home Carer Tax Credit can be claimed when:
- The married couple or civil partners are jointly assessed for tax
- One spouse or civil partner works in the home caring for one or more dependent people
- The home carer’s own income is under €7,200. A reduced tax credit applies if the carer’s income is between €7,200 and €10,400.
Carer’s Allowance or Carer’s Benefit are not taken into account when determining the home carer’s income but they are taxable sources of income. This means that if you are claiming Carer’s Allowance or Carer’s Benefit, it will make up part of your jointly assessed income.
Who is a dependent person?
A dependent person is a:
- Child for whom Child Benefit is payable
- Person aged 65 or over
- Person with a disability who requires care
A dependent person you are caring for cannot be a spouse or civil partner. They can however, be a relative by marriage, or someone for whom you act as a legal guardian.
Does a relative have to live with us to be a dependent person?
The dependent person normally has to live with you and your spouse or civil partner in the tax year in order to quality for Home Carer Tax Credit.
A dependent person who is a relative can be cared for outside your home. However, if the person is not living with you they must live next door in a neighbouring residence, or on the same property, or within 2 km of your home. In addition, there must be a direct communication link between you (for example, a telephone line or alarm system).
Rates
The Home Carer Tax Credit for 2020 is €1,600.
If the home carer has an income of up to €7,200 in their own right for the tax year, the full tax credit may be claimed.
Reduced tax credit
However, if the income exceeds €7,200, the difference between the actual income and €7,200 is calculated and then halved. The Home Carer Tax Credit is then reduced by that amount. The following table gives examples of how the tax credit is calculated for different levels of income.
If the home carer’s income is €10,400 or more during 2020 then you cannot claim the tax credit.
| Income of Home Carer | Tax credit in 2020 | Reduction in tax credit in 2020 |
| €7,200 | €1,600 | Nil – The full tax credit is due |
| €7,450 | €1,475 | €7,450 – €7,200 = €250 ÷ 2 = €125 |
| €7,950 | €1,225 | €7,950 – €7,200 = €750 ÷ 2 = €375 |
| €8,200 | €1,100 | €8,200 – €7,200 = €1,000 ÷ 2 = €500 |
| €8,450 | €975 | €8,450 – €7,200 = €1,250 ÷ 2 = €625 |
| €8,700 | €850 | €8,700 – €7,200 = €1,500 ÷ 2 = €750 |
| €8,950 | €725 | €8,950 – €7,200 = €1,750 ÷ 2 = €875 |
| €9,050 | €675 | €9,050 – €7,200 = €1,850 ÷ 2 = €925 |
| €9,200 | €600 | €9,200 – €7,200 = €2,000 ÷ 2 = €1,000 |
| €9,400 | €500 | €9,400 – €7,200 = €2,200 ÷ 2 = €1,100 |
| €9,600 | €400 | €9,600 – €7,200 = €2,400 ÷ 2 = €1,200 |
| €10,200 | €100 | €10,200 – €7,200 = €3,000 ÷ 2 = €1,500 |
| €10,400 | Nil | €10,400 – €7,200 = €3,200 ÷ 2 = €1,600 |
You cannot claim the Standard Rate Cut-Off Point for dual income couples and the Home Carer Tax Credit. Your local tax office will help you to determine which is better for you.
How to apply
You can claim Home Carer Tax Credit by using PAYE Services, which is available through Revenue’s myAccount. You can access Revenue’s myAccount service online or on mobile and tablet devices using Revenue’s RevApp. You can also apply by completing a Home Carer Tax Credit claim form (pdf).
Where to apply
Applications for the Home Carer Tax Credit should be made to Revenue.
