What are tax credits?

Tax credits reduce the amount of income tax you pay, and are dependent on your personal circumstances. This page explains tax credits in Ireland, including personal tax credit, single parent tax credit, and rent tax credit.

Put simply, tax credits and tax reliefs reduce the amount of income tax you have to pay. Revenue will give you a personal tax credit if you are an Irish resident, and, depending on your personal circumstances, you may be able to claim additional tax credits.

The basic personal tax credit you get depends on whether you’re:

• Single

• Married or in a civil partnership

• Widowed or a surviving civil partner

• Separated

• Divorced or a former civil partner

You might be entitled to additional tax credits if, for example, you have a disability, are widowed or a home carer. All tax credits are listed in the tax rates, bands and reliefs chart.

This is what every Irish resident is entitled to. In the 2024 Budget, the Irish Government increased the personal tax credit from €1775 to €1875. Depending on your earnings, almost all workers are entitled to this tax credit.

For 2025, the Government has announced a further €125 increase in the personal tax credit, taking it to €2,000.

If you receive income that is taxable under the Pay As You Earn (PAYE) system, including wages and occupational pensions, for example, you can claim the employee tax credit. The maximum employee tax credit for 2024 is €1,875.

The employee tax credit will also be increased to €2,000 in 2025.

The single parent tax credit was also increased from €1650 to €1750 and can be claimed in addition to the personal tax credit. Budget 2025 proposes a further increase of €125.

The single parent tax credit is for people who have children but are not cohabiting. If you have children and are separated, divorced, or a former civil partner, you are entitled to this tax credit. If the child resides with both parents for part of the year, only one parent can claim the full single person child carer credit, subject to Revenue guidelines.

The rent tax credit was introduced in 2022 to help tenants cope with rising accommodation prices. It has been increased to €750 for 2024. This will also be backdated to allow for claims to be made for the 2022 and 2023 tax years.

From 2025, the rent tax credit will go up by €250, bringing it to €1,000 per person, and €2,000 for a jointly assessed couple.

The tax-free allowance in Ireland:

• If you are not married or in a civil partnership, you are exempt from income tax if your total income is less than €18,000 per annum, or you are 65 or older.

• If you are married or in a civil partnership and jointly assessed, you are exempt from income tax if your total income is less than €36,000 per annum, or if either you, or your spouse, is 65 or older.

• If you have dependent children, your exemption limits are increased by €575 per child for your first two children; and €830 per child for each additional child.