Tax Credits Married Couple

mcswec

Hi,

My family returned from 8 years in Australia in 2017. I had a baby that year so didn't return to work until June 2018 and had transferred all my tax credits to my husband. I started working part-time so left my credits with him. I now work 4 days with a variable 5th day where I do some contracting. He still earns significantly more than me (approx 20k) and together we have a joint income of 100k. Does it make any difference if my tax credits stay with him? He has a fixed salary and mine can be variable so from a budgeting perspective it works well as we know exactly how much he gets each month. However the extra 5th day nearly doesn't seem worth it as I get taxed so much on it.

Any advice would be much appreciated. The tax office pretty much said its our decision. I'm just wondering does it make any difference financially?

Thanks

Stratvs

Tax credits & cut off are the two different parts of this.

Tax Credits : - Your credits are probably €1650 x 2 personal and €1,650 x 2 Employee credit. You can transfer all bar your own employee credit to the other. You've probably done this.

Cut-off : - Max any one can get at 20% is €43,550 with up to €26,300 at 20% for the other. So joint max at 20% is €69,800. As it appears you jointly exceed that and are both paying 40% on marginal income then there is no benefit by moving them apart from the psychological impact possibly of you paying more on your share of income as he has the bulk of the credits/cut-off. It's like a see-saw if you move them. One end goes up and the other goes down by the same amount.

mcswec

Thanks so much for the quick reply. Yes it is quite depressing when I see how much tax has come out of my pay cheque! But if jointly it doesn't make a difference then that's fine. It all goes into the same pot anyway

Thanks!