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Tax Returns - Oliver Niland Chartered Accountant & Tax Specialist - Galway Ireland

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Taxation of PUP and TWSS payments

Taxation of PUP and TWSS payments

Taxation of payments received under the Temporary Wage Subsidy Scheme and Pandemic Unemployment Payment

Most income is liable to income tax and USC (Universal Social Charge) and is deducted in real-time when an employee is paid by their employer.

However, TWSS and PUP payments were not taxed in real-time and instead are liable to income tax and USC at the end of the year (2020).

In January 2021, Revenue will make a Preliminary End of Year Statement available to all employees, including those who were in receipt of the TWSS or PUP. The Preliminary End of Year Statement will include pre-populated information showing the amount of TWSS and/or PUP payments, if any, received by the employee concerned according to Revenue records.

The statement will also provide employees with a preliminary calculation of their income tax and USC position for 2020 and will indicate whether their tax position is balanced, underpaid or overpaid for the year.

When the Preliminary End of Year Statement is available, employees will have an opportunity to update their personal record, declare any additional income and claim additional tax credits due, such as qualifying health expenses, via myAccount, to arrive at their final liability for 2020.”

Employees will be given the opportunity to fully or partially pay any income tax and USC liability through the Payments/Repayments facility in myAccount.

Otherwise, Revenue will collect the liability, interest free, by reducing the employees tax credits over 4 years to minimise any hardship. The reduction of tax credits will start in January 2022.

Any queries on the above, give me a call on 091 763817 or email me at oliver@taxreturnhelp.ie

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