3rd Level Fees Tax Relief?

Onecoolcookie

Hi all,
Quick one. Considering studying for a postgrad degree part-time over the next 2 years while continuing to work.
What tax relief am I eligible for? And how can I optimise the amount of relief? (options to pay fees upfront, two instalments or monthly instalments)

Squatter

Onecoolcookie wrote: »

Hi all,
Quick one. Considering studying for a postgrad degree part-time over the next 2 years while continuing to work.
What tax relief am I eligible for? And how can I optimise the amount of relief? (options to pay fees upfront, two instalments or monthly instalments)

Google is your friend.

http://www.citizensinformation.ie/en/education/third_level_education/fees_and_supports_for_third_level_education/tax_relief_for_third_level_fees.html

Onecoolcookie

Cheers thanks.

Hoping to get some advice from someone who's been through the process. Have read the info on revenue.ie but still a bit confused

Squatter

Onecoolcookie wrote: »

Cheers thanks. Hoping to get some advice from someone who's been through the process. Have read the info on revenue.ie but still a bit confused

What particular aspect(s) is/are confusing you?

(Don't want to sound patronising, but it's a pretty straightforward scheme - especially for someone contemplating doing a postgrad course!)

Henryhill2

Squatter wrote: »

What particular aspect(s) is/are confusing you?

(Don't want to sound patronising

but you do

Squatter

Henryhill2 wrote: »

but you do

Well so be it. At least I'm trying to help the OP. Are you?

wiggle16

Hi OP

Again, what exactly is confusing you? I think you might be over-thinking how tax relief works or how complex it is. There is no way to maximise it or make it more efficient: you are either entitled to a relief or you aren't.

- The allowable amount of tuition fees is €7000.
- You then disregard €1500 (this is the "disregard amount" for part-time courses such as yours).
- The remaining amount is allowable at the standard rate of tax (which just means you divide it by 20%).

So if your postgrad costs €9000, then:
You restrict it to €7000,
Disregard €1500,
Leaving you with €5500,
Of which: €5500 @ 20% = €1100 eligible tax relief.

With regards installments, the following example is on the Revenue website:

Jane pays tuition fees for a full-time course commencing in 2014 which costs €7,000. The course runs for nine months and ends in 2015. She pays one fee instalment of €3,500 in September 2014, and the second instalment of €3,500 in January 2015.
Jane has two options:

Option one
She could claim relief on €7,000 for the tax year 2014.
She must subtract the disregard amount of €2,750 from €7,000. She is left with €4,250. She is allowed tax relief of 20%, which is €850.

Option two
She could claim relief on €3,500 in 2014 and €3,500 in 2015.
For 2014, she must subtract the disregard amount of €2,750 from €3,500. She is left with €750. She is allowed tax relief of 20%, which is €150.
For 2015, she must subtract the disregard amount of €3,000 from €3,500. She is left with €500. She is allowed tax relief of 20%, which is €100.
Her total relief for Option two is €250.

That's pretty much it.

Onecoolcookie

wiggle16 wrote: »

Hi OP

Again, what exactly is confusing you? I think you might be over-thinking how tax relief works or how complex it is. There is no way to maximise it or make it more efficient: you are either entitled to a relief or you aren't.

- The allowable amount of tuition fees is €7000.
- You then disregard €1500 (this is the "disregard amount" for part-time courses such as yours).
- The remaining amount is allowable at the standard rate of tax (which just means you divide it by 20%).

So if your postgrad costs €9000, then:
You restrict it to €7000,
Disregard €1500,
Leaving you with €5500,
Of which: €5500 @ 20% = €1100 eligible tax relief.

With regards installments, the following example is on the Revenue website:

Jane pays tuition fees for a full-time course commencing in 2014 which costs €7,000. The course runs for nine months and ends in 2015. She pays one fee instalment of €3,500 in September 2014, and the second instalment of €3,500 in January 2015.
Jane has two options:

Option one
She could claim relief on €7,000 for the tax year 2014.
She must subtract the disregard amount of €2,750 from €7,000. She is left with €4,250. She is allowed tax relief of 20%, which is €850.

Option two
She could claim relief on €3,500 in 2014 and €3,500 in 2015.
For 2014, she must subtract the disregard amount of €2,750 from €3,500. She is left with €750. She is allowed tax relief of 20%, which is €150.
For 2015, she must subtract the disregard amount of €3,000 from €3,500. She is left with €500. She is allowed tax relief of 20%, which is €100.
Her total relief for Option two is €250.

That's pretty much it.

I do tend to overthink things but thanks for breaking it down for me! Was just conscious of making a mistake and costing myself.

So just to clarify from my understanding there's no difference in if I pay €9000 in one lump sum or if I pay a sum of €9000 over 12 monthly installments? I am still eligible for the €1100 tax relief regardless as per your example above if I claim the tax relief in a single tax year eg.2019

Calahonda52

Onecoolcookie wrote: »

I do tend to overthink things but thanks for breaking it down for me! Was just conscious of making a mistake and costing myself.

So just to clarify from my understanding there's no difference in if I pay €9000 in one lump sum or if I pay a sum of €9000 over 12 monthly installments? I am still eligible for the €1100 tax relief regardless as per your example above if I claim the tax relief in a single tax year eg.2019

There is a difference if you read example above closely and see that in option one Jane got 850 TR
Option 2 she got 250 TR.
You might overthink but you are not over reading to be honest, as is evident by you not seeing the 850 vs 250 and asking why.

The 12 instalments over two tax years will reduce the tax relief

The disregard amount is per annum and is different for FT vs PT courses

https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/education/tuition-fees-paid-for-third-level-education/how-do-you-calculate-the-relief.aspx
What is a disregard amount?
Each claim is subject to a single disregard amount each tax year. This amount is taken away from your total qualifying fees. You cannot receive relief on that portion of the fees.

If you have paid fees for more than one course or student, you only subtract the disregard amount once.

There are different disregard amounts for each year, and for full-time or part-time courses. see table in link above

Onecoolcookie

Calahonda52 wrote: »

Onecoolcookie wrote: »

I do tend to overthink things but thanks for breaking it down for me! Was just conscious of making a mistake and costing myself.

So just to clarify from my understanding there's no difference in if I pay €9000 in one lump sum or if I pay a sum of €9000 over 12 monthly installments? I am still eligible for the €1100 tax relief regardless as per your example above if I claim the tax relief in a single tax year eg.2019

There is a difference if you read example above closely and see that in option one Jane got 850 TR
Option 2 she got 250 TR.
You might overthink but you are not over reading to be honest, as is evident by you not seeing the 850 vs 250 and asking why.

The 12 instalments over two tax years will reduce the tax relief

The disregard amount is per annum and is different for FT vs PT courses

https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/education/tuition-fees-paid-for-third-level-education/how-do-you-calculate-the-relief.aspx
What is a disregard amount?
Each claim is subject to a single disregard amount each tax year. This amount is taken away from your total qualifying fees. You cannot receive relief on that portion of the fees.

If you have paid fees for more than one course or student, you only subtract the disregard amount once.

There are different disregard amounts for each year, and for full-time or part-time courses. see table in link above

Can it not be 12 installments over a single tax year to get the full amount of tax relief?

Calahonda52

Onecoolcookie wrote: »

Can it not be 12 installments over a single tax year to get the full amount of tax relief?

yes, however
your post said
Considering studying for a postgrad degree part-time over the next 2 years while continuing to work.
hence my comment

Onecoolcookie

Calahonda52 wrote: »

Onecoolcookie wrote: »

Can it not be 12 installments over a single tax year to get the full amount of tax relief?

yes, however
your post said
Considering studying for a postgrad degree part-time over the next 2 years while continuing to work.
hence my comment

Yes, however year one will already cover the max amount allowable for tax relief on a postgrad course.
Grand sorted.