Is the covid wage subsidy taxable on employees ?
The payments are liable to income tax; however, the subsidy is not taxable in real-time through the PAYE system
during the period of the Subsidy scheme.
Instead the employee will be liable for tax on the subsidy amount paid to them by their employer by way of review at the end of the year.
When an end of the year review takes place, it may be the case that an employee’s unused tax credits will cover any
further liability that may arise. Where this is not the case, and should an Income Tax liability arise, it is normal
Revenue practice to collect any tax owing in manageable amounts by reducing an individual’s tax credits for a future
year(s) in order to minimise any hardship.
Additionally, if an individual has any additional tax credits to claim, for example health expenses, this will also reduce any tax that may be owing.
One way of minimising any tax liability at year end, is to request Revenue put you on a “week one ” basis which will mean you will not receive any tax refunds while being on the subsidy payment thereby reducing any tax liability at year end. This can be done by emailing revenue through “myenquiries” on your myaccount or ROS portal with revenue.
Any queries on same give me a call on 091 763817 or email me at oliver@taxreturnhelp.ie