Budget 2010 - Income Tax Changes

In his Budget Statement on 14 October 2008, the Minister for Finance announced a number of changes to the personal tax system.

Tax Credits

The table below outlines the changes for 2009.

Tax Credit	2009	2010
Single Person	1,830	No change
Married person	3,660	No change
PAYE Credit	1,830	No change
Widowed person (without dependant children)	2,430	No change
One Parent Family Credit	1,830	No change
Incapacitated Child Credit Max	3,660	No change
Blind Tax Credit:
Single Person	1,830	No change
One Spouse Blind	1,830	No change
Both Spouses Blind	3,660	No change
Widowed Parent:
Bereaved in 2008	-
Bereaved in 2007	4,000	No change
Bereaved in 2006	3,500	No change
Bereaved in 2005	3,000	No change
Bereaved in 2004	2,500	No change
Bereaved in 2003	2,000	No change
Age Tax Credit:
Single/Widowed	325	No change
Married	650	No change
Dependent relative	80	No change
Carers credit	900	No change

The following reliefs remain unchanged:

Relief (allowed at the taxpayer's top rate of tax)	2009 € Max	2010 € Max
Employing a Carer	50,000	No change

Changes to Standard Rated Reliefs are as follows:

(Allowed at 20% rate band)

Relief	2009 € Max	2010 € Max
Rent Tax Relief:
Single - under 55	2,000	No change
Married/Widowed - under 55	4,000	No change
Single - 55 & over	4,000	No change
Married/Widowed - 55 & over	8,000	No change
Trade Union Subscriptions	350	No change

Services Charges

Relief on service charges remains unchanged. A maximum of €400 tax relief is granted (at 20% tax rate) in 2010 for service charges paid in the year 2009.

Rent-a-Room Scheme

The limit of the exemption from income tax, which applies to rent, received, where a person rents out a room or rooms in his or her principle private residence, remains unchanged at €10,000.

Tax Rates and Tax Bands

The tax rates remain unchanged at 20% (standard rate) and 41% (higher rate).

The table below sets out the tax rates and bands.

Personal Circumstances	2009 €	2010 €
Single/Widowed without dependant children	36,400 @ 20% Balance @ 41%	36,400 @ 20% Balance @ 41%
Single/Widowed qualifying for One Parent Family Tax Credit	40,400 @ 20% Balance @ 41%	40,400 @ 20% Balance @ 41%
Married Couple one spouse with Income	45,400 @ 20% Balance @ 41%	45,400 @ 20% Balance @ 41%
Married Couple both spouses with Income	45,400 @ 20% with increase of 27,400 max. Balance @ 41%	45,400 @ 20% with increase of 27,400 max. Balance @ 41%

Exemption Limits

There is no change to the exemption limits for persons aged 65 years and over:

Personal Circumstances	2009 €	2010 €
Single/Widowed 65 years of age & over	20,000	20,000
Married Couple 65 years of age & over	40,000	40,000

Marginal Relief will continue to apply where income does not greatly exceed the relevant exemption limit.

The above exemption limits are increased by €575 for each of the first two dependent children and by €830 for the third and subsequent children.

Health Expenses Relief

Health expenses relief is granted at the standard rate for expenses incurred from 1 January 2009 with the exception of nursing home expenses, which continue to be releived at the standard rate.

Income Levy

The rates and thresholds of the Income Levy remain unchanged.

Applicable from 1 January 2010:

Income Levy Thresholds	Rate
Income up to €75,036	2%
Income from €75,037 to €174,980	4%
Income above €174,980	6%

Relief from Income Levy for certain Farm expenditure

Relief from the income levy will be allowed in respect of certain expenditure incurred by farmers to comply with the requirements of the EU Nitrates Directive 91/676/EEC.

Tax Relief at Source – Mortgage Interest Relief

Qualifying loans taken out before 1 July 2011 will continue to get relief for 7 years. Transitional measures will be provided for qualifying loans taken out between 1 July 2011 and the end of 2013.

Those whose entitlement to relief would, in the absence of this change, expire in 2010 or after, will continue to qualify for relief at the applicable rate up until the end of 2017. The relief will be abolished completely by the end of 2017.

Details will be provided in the Finance Bill.