News | Sunday, 21 June 2009

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Self-employed mums given higher €5,000 tax cut

A €2,000 tax credit for gainfully occupied women who have had children since 2007 has been increased to €5,000 for self-employed women only.
A legal notice published earlier this week notched up the tax credit, which was first announced in last year’s budget as a one-year tax exemption for employed women who became mothers in 2007, but was later capped at €2,000.
Although the finance ministry had claimed the €2,000 tax credit was sufficient for women, the capping came under pressure from women’s bodies.
The tax credit is available for all mothers of children under 16, returning to work after an absence of at least five years from active employment; or for women either currently employed or who were not absent from active employment for more than five years, and who had children since 2007.
Employers will now have the option to deduct from their employee’s wages only that amount that would be payable as tax, after the tax credit is deducted.
However, they will also have the option to deduct tax as usual. The employee would then claim back the refund in her tax return.
The government had previously introduced tax credits to encourage women to return to employment in 2005.

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