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Marriage & Tax 

Single Assessment

Under single assessment, each spouse is treated for tax reasons as a single person. Each spouse pays their own tax independently of the other, completes their own tax return, and claims their own tax credits. They have no right to transfer or share tax credits or standard rate cut-off point among each other. 

This is normally not a good idea for couples. It can increase a couple’s tax bill and rarely reduce their tax bill. It can also disqualify the couple from claiming Home Carer's Tax Credit if either spouse has low income and cares for a child or dependent in the home.

Separate assessment

Under separate assessment, each spouse’s tax affairs are treated independently of the other, but some tax credits are divided equally between the spouses. 

These credits are the Married tax credit, the Age tax credit for over 65s, and the credits available to the Blind and those with an Incapacitated Child. Where a spouse does not use their full entitlement to these credits, the other spouse can use them.  

This concession does not extend to other credits such as the PAYE tax credit and employment expenses credit.

If a spouse does not use their full standard rate cut-off point, they can share the unused portion with their partner, up to a shared total of €45,400 in 2010. If they have sufficient income, each spouse can otherwise enjoy a cut-off point of €36,400 in 2010, which equates to €72,800 per couple. 

Claims for separate assessment must be made in writing to the couple’s local tax office. 

Joint assessment

The joint assessment option is usually the most favourable basis for a married couple. This option is usually granted automatically by the tax office. It allows couples to share and allocate their tax credits and standard rate cut-off point to suit their own circumstances.

If only one spouse has taxable income, all tax credits and the standard rate cut-off point will be allocated to the spouse with the income. 

If both have taxable income, they can decide which spouse is to be the assessable spouse. The assessable spouse will be responsible for completing a tax return if this is necessary and is technically chargeable to tax on the couple’s joint income. 

Joint assessment is especially useful if one spouse is self-employed and the other is in PAYE employment. Couples can choose to use their tax credits in whatever way suits them best. Some prefer to allocate their credits against a spouse’s PAYE income, meaning that their take-home pay is boosted on a regular basis. 

Alternatively, they can decide to let their tax credits be counted against their joint liability under self-assessment, meaning a lower tax bill at the end of the year.

Tax Refunds

Tax refunds for jointly-assessed couples are normally apportioned and repaid on the basis of the tax paid by each spouse. 

The Assessable Spouse Election Form

This is a special Revenue form which married couples can use to notify Revenue of their marriage, and specify how they wish to be taxed. Once you download and complete the form, you can forward it to your local Revenue office.

Year of Marriage Refunds

Before they get married, the prospective husband and wife are taxed separately as single people. This arrangement also applies for the year of marriage. However the couple can claim a tax refund if their total combined tax bill for the year of marriage is higher than they would have paid had they been taxed that year as a married couple.

Such refunds only apply for the period from the date of marriage until the following 31 December.  So for example, for a couple who got married  on 10 May 2010, their potential tax refund will be calculated for the period from 10  May 2010 to 31  December 2010. 

“Year of marriage” refunds normally only apply:

And finally…

It is important for married couples to be aware of the tax rules affecting them. Newly-weds should always advise the tax office of their marriage. Couples should also occasionally review their tax affairs to ensure that they are in order. 

If this is not done, then the couple run the risk of paying too much tax. This can be an expensive mistake, as the “four year rule” means that taxpayers can only claim refunds of overpaid tax within four years of the end of the tax year, and unclaimed overpayments are lost forever.

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