Earned Income Tax Credit
From 1 January 2016, the Earned Income tax credit can be claimed by self-employed individuals and proprietary directors who are ineligible for the PAYE Employee tax credit. This tax credit is calculated at 20% of an individual’s earned income (excluding earned income that is taken into account for the PAYE Employee tax credit).
The maximum relief for 2016 is €550. This is calculated as follows – €2,750 @ 20% = €550. Where an individual’s earned income is below €2,750, the tax credit is restricted to 20% of the income.
For example, total earned income €2,000 @ 20% = €400 (max.).
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