you can make a claim for tax relief during the year or after the end of the year
If your employer pays you a working from home allowance towards these expenses, you can receive up to €3.20 per day without paying any income tax, PRSI or USC on it. If your employer pays more than €3.20 per day to cover these expenses, you pay must tax, PRSI and USC as normal on the amount above €3.20. You should note that employers are not legally obliged to make this payment to their employees. If your employer doesn’t pay you a working from home allowance for your expenses, you can then make a claim for tax relief during the year or after the end of the year.
You will get money back from the taxes you paid. If you and someone else share your bills , the cost is divided between you, based on the amount paid by each person
Things to consider:
How much can I clam?
The amount of costs you can claim is based on: 1. How many days you worked from home 2. The cost of your expenses 3. The percentage of your costs that Revenue counts as working from home expenses You can claim relief on costs at the following rates: For 2022 and 2023, 30% for electricity, heating and internet costs For 2020 and 2021, 30% for internet costs and 10% for electricity and heating costs For 2019, 10% for electricity and heating costs only
How do I calculate it?
For 2022 and 2023, to calculate the amount of costs you can get tax relief on: Add your electricity, heating and internet costs and multiply the total costs by the number of days worked at home Divide by 365 Multiply by 30% (0.3)
What amount of tax relief do I get?
When you know the amount of costs that you can get tax relief on you can then calculate the tax savings. You get tax relief on the amount of your costs at a rate of 20% or 40%, whichever is the highest rate of income tax you pay. Remember! If your employer pays you an allowance towards your expenses, that amount paid is deducted from the amount you can claim back from Revenue.
How do I apply for this relief
You can claim tax relief online using Revenue’s myAccount service. For 2023, you can now claim the tax relief during the year or after the end of the year. If you claim during the year, you can receive real-time credits. This effectively means that you can claim for expenses when you pay them and get increased tax credits in your subsequent payroll payments from your employer. Using Revenue's "myAccount" service, you can make a real-time credit claim.
To Summarise
In summary, revenue provides guidance on this new relief and if you are unsure or need assistance you should contact revenue direct. Remember! – You must be able to account for each expense you intend to claim. This means keeping a record of all receipts and bills. You can use the Receipts Tracker service to do this for 2020 and subsequent years. Otherwise, you should keep documents for 6 years from the end of the tax year that the claim is for.
Author..
John Carolan ACMA, CEO of Solve Outsource
Contact Email: john@solve.ie
