One of the sections of your 2020 income tax return is the personal allowances. What does this cover?
FAQ
The Tax and Customs Administration has published a comprehensive note published a set of questions and answers about this tax deduction. These FAQs relate to the year 2019, but are also relevant for 2020.
The tax deduction is set out in Chapter 6 of the Income Tax Act 2001. It covers the following categories:
- expenditure on maintenance obligations;
- expenditure on specific healthcare costs;
- weekend activities for people with disabilities;
- training costs;
- tax-deductible donations.
These costs are deducted from your income from employment and property. If the amount of the deduction exceeds your income, the excess may be deducted from your income from savings and investments and your income from a substantial interest. Personal allowances that have not been claimed in a given year may be claimed in subsequent years.
A deduction threshold applies to most of the categories listed.
Maintenance obligations
This concerns obligations arising from family law: spousal maintenance.
Specific healthcare costs
The scope for deducting these costs has been significantly restricted since the introduction of the Income Tax Act in 2001. Strict conditions apply to the categories for which a deduction is still possible. The vast majority of the FAQs therefore relate to this item.
Weekend activities for people with disabilities
Fixed amounts apply to this deduction. For 2020, these are €11 per day and €0.19 per kilometre.
The severely disabled brother, sister or child must be aged 21 or over and usually reside in a care home. The allowance may also be claimed by a mentor or guardian who looks after the personal interests of a severely disabled person.
Training costs
The costs must relate to the acquisition of new knowledge, with the aim of using that knowledge to generate an income. Only the costs of tuition fees and compulsory study materials are deductible.
Tax-deductible donations
A distinction is made between regular donations and other donations. There is no threshold and no maximum deduction amount for regular donations. Other donations are only deductible if they are made to an organisation listed in the ANBI register registered organisation. Regular donations may also be made to associations with full legal capacity and at least 25 members, which are not subject to corporation tax.