This employer notice covers the following topics:
Real Time Credits facility (for employees/pension recipients)
Direct Temporary Wage Subsidy
1. Real Time Credits
The facility to claim certain credits/reliefs in "real-time" is now available for employees/pension recipients (this is in addition to the in-year tax reliefs currently available, listed in Appendix 1).
This allows employees to claim tax relief for specific expenditure incurred from 1 January 2021, under the Health Expenses and Nursing Home Expenses categories. This may result in an increase in the frequency of changes to Revenue Payroll Notifications. Please see example below:
In September 2021, Catalina submits a qualifying claim for Nursing Home Expenses to Revenue, to the value of €1,715. This will result in an amended RPN being made available to you, showing the following details:
Previous RPN details:
Annual Tax Credit: €3,300 Annual Standard Rate Cut-Off point: €35,300
New RPN details:
Annual Tax Credit: €5,015 Annual Standard Rate Cut-off point: €43,875
You must always ensure that you request the latest RPN for all employees/pension recipients before you run your payroll.
The introduction of the Real-Time Credits facility for employees/pension recipients may impact on the amount of debt that can be warehoused under debt warehousing. Where an RPN is made available on a cumulative basis by Revenue, in respect of your employee(s)/pension recipients, you should make any refund that may arise to the employee/pension recipient. Any resulting refund will reduce the total amount of PAYE due on your monthly return for the relevant period. Please see example below:
Period:August:September:October:Refund due to employee:(€500)Monthly liability* to Revenue:€3,000*€2,500*€2944.44*(*warehoused, where applicable)
As Catalina is liable to tax at the higher rate (40%), a refund of €500 is due. This refund is accounted for by you as demonstrated in the example above.
Appendix 1:
Personal tax credit
Employee tax credit
Earned income tax credit
Flat Rate Expenses (FREs)
Single Person Child Carer Credit (SPCCC)
Home carer credit
Tuition fees
Incapacitated child tax credit
Widowed parent tax credit
Dependent relative tax credit
Blind person's tax credit
Guide dog allowance
Assistance dog allowance
Nursing home expenses
Relief for maintenance payments
Income continuance
Medical insurance relief (BIK)
Personal Retirement Savings Account (PRSA)
Additional Voluntary Contributions (AVC)
Retirement Annuity Relief
2. Direct Temporary Wage Subsidy
Direct Temporary Wage Subsidy (DTWS) is an additional subsidy payment due to certain employees who were in receipt of payments under the Temporary Wage Subsidy Scheme (TWSS). As the TWSS reconciliation process has been completed by employers, Revenue will calculate the amount of DTWS due to each employee for 2020. The amount due, which is subject to income tax and USC, will be shown on the employee Preliminary End of Year Statement and Statement of Liability for 2020. Employers should note that DTWS will be offset against any income tax and/or USC liability that the employee may have for 2020. Additionally, some employees may receive an income tax refund from Revenue, depending on the amount of DTWS due for 2020.
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