Love is in the Air: The Tax Benefits of Marriage

Congratulations to all the newly engaged couples out there! As you embark on this exciting journey towards married life, it’s worth noting that beyond the personal and emotional benefits, there may also be financial perks on the horizon, specifically regarding taxation. The tax rules in Ireland offer potential advantages for you and your future spouse.

Understanding Your Tax Assessment Options

If you are married or in a civil partnership you have the flexibility to choose how you are assessed for tax purposes. This choice can have an impact on your financial health as a family. You will need to decide whether to opt for joint, separate, or single assessment. It’s a decision that warrants careful consideration, reflecting your unique circumstances.

You need to communicate your chosen assessment type to the Revenue Commissioners. Without this notification, you’ll continue to be assessed as single individuals, potentially missing out on beneficial tax arrangements available to married couples.

When notifying Revenue, you’ll need to provide your marriage date along with both you and your partner’s Personal Public Service (PPS) number. This step is essential for transitioning to a married tax status which could lead to significant tax advantages, including potential refunds if your combined tax as singles exceeds what it would be as a married couple. These refunds, however, are calculated from the date of marriage and assessed after the year end.

Joint Assessment

Joint assessment, is the option chosen by many couples due to its flexibility, and in general this option is the default position. This method allows you to allocate tax credits and rate bands in a way that best suits your joint financial situation. Whether both partners earn income, or one is the primary earner, you should nominate an ‘assessable spouse’ – typically this defaults to the higher earner.

Assessable Spouse Election form

Opting for joint assessment is automatically considered by Revenue once you inform them of your marriage. It’s worth noting that you’re not locked into this choice; if your circumstances change or you simply prefer a different arrangement, separate assessment is also an option (any change must be requested in writing by March 31^st in the tax year).

In summary

The potential income tax benefits will depend on your circumstances but you should benefit if any of the following applies;

• You are both working but only one of you are paying tax at the higher rate. As a married couple your threshold to paying tax at the lower rate increases by €9,000 (i.e. from €42,000 to €51,000) and if your spouse has income of at least €33,000 then this brings your joint threshold to €84,000.
• Both of you are working and one of you has unused tax credits. As a married couple you can transfer some credits that you haven’t used to your partner.
• Only one of you is working. In this regard your threshold, as mentioned above is increased by €9,000 to €51,000 and you can benefit from the married tax credit thereby increasing your take-home pay.
• If one of you is caring for children at home then you may benefit from the Home Carer Tax Credit which is currently €1,800.

Tax should not be a driver as to how you live your life. However, understanding the system and insightful planning can make that financial difference for you and your family.  So when you’re ready to discuss your needs make sure to talk to our team of tax experts or your Dedicated Account Manager.

We’re here to support you every step of the way, but for now enjoy your celebrations!

This article has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only.