AITI Chartered Tax Adviser

What is the the home carer tax credit?

To obtain this tax credit you must be a qualifying claimant i.e., you or your spouse (the carer spouse), must care for a dependent person who resides with you during the tax year. A dependent person means:

(a) a child in respect of whom you or your spouse are entitled to child benefit,
(b) an individual who was aged 65 or more during the tax year,
(c) an individual who is permanently incapacitated (physically or mentally).

Child benefit is payable in respect of all children under 16 years of age, and children under 19 years of age in full-time education.
A dependent person who is your relative (this includes a relation by marriage and a person for whom you are legal guardian) is treated as residing with you if:

(a) you live in close proximity to each other, i.e., next door, on the same property, or within 2km of each other, and
(b) there is a direct communication link between your home and the dependants home.

The relief is given to the spouse who cares for the relative.
The tax credit is the lower of:

(a) €1,500, and
(b) the amount which reduces your income tax liability to nil.

If you have income in your own right of more than €7,200 in the tax year, your tax credit is reduced by half the amount of the excess. The social welfare careers allowance does not count as income in this regard.
If you take up full time work, you may continue to claim the full home care tax credit for the tax year in which the new job begins, provided you were entitled to the home carer tax credit in the previous tax year.
If you claim the home carer tax credit, you may not also claim the increased rate band applicable for a dual income couple (see above). You may opt to take the increased rate band instead of the home carer tax credit.