Getting a tax refund

Introduction

You can get a refund of tax that you have already paid if you were employed and become unemployed. You can also get tax back if you are still employed but have paid more tax than you were liable for.

Why would I get a tax refund?

There are a number of reasons why you may now be liable to pay less tax than previously and may be due a refund.

Your tax liability may be reduced because you have become unemployed. For PAYE workers your tax liability is spread out evenly over the year, so your tax credits are divided to give a weekly or monthly figure. If it is expected that your earnings will bring you into the higher bracket of 41%, your employer is instructed by Revenue to deduct part of your tax at 20% and part at 41%. The point at which you start paying 41% is called your standard rate cut-off point.

When your employer calculates your tax liability, they calculate the total tax due from 1 January to the date which your most recent wages are paid or when you leave that employment. This is known as calculation on a cumulative basis.

If you then become unemployed you may not be using all of your tax credits from then on, and you may not be liable to pay at the higher rate either, even if you are getting Jobseeker’s Benefit, which is taxable. (Jobseeker’s Allowance is not taxable).

Any tax credits and standard rate cut-off point, which is not used in a pay period, is carried forward to the next pay period within that tax year.

So, after being unemployed for some weeks, you will have unused tax credits. Revenue can re-calculate the amount of tax which you should pay, using all your credits to date, and give you a refund if you have overpaid.

You may also get a refund if your tax liability has been incorrectly calculated by your employer and you have overpaid tax, or because you were paying ‘emergency tax’.

Rules

If you are unemployed

If tax has been deducted from your pay since 1 January of the current year and you are now unemployed you may be entitled to a tax refund. If you have not paid any tax, you will not be due a refund.

Jobseeker’s Benefit (JB) is taxable. however, the first €13 per week of Jobseeker’s Benefit and the Increase for a Child Dependent proportion of your JB are not taxable.

If you are getting Jobseeker’s Benefit and make a claim for a tax refund, the taxable proportion of your JB and your wages are added together to determine if you are entitled to a refund.

Jobseeker’s Allowance is not taxable.

You can see an example of how your tax refund is calculated if you are unemployed.

If your working hours are reduced

You may not be liable to pay tax at the higher rate if your working hours are reduced. You may also want to transfer some of your tax credits to your spouse, if they have higher earnings. Contact your regional Revenue office, as in Where to Apply below.

If you are claiming Jobseeker’s Benefit, this will be part of your taxable income.

If you are employed and think you may have overpaid tax

If you think your employer has incorrectly calculated your tax liability you must submit your P60 and written details of your claim. If your spouse is working you must also submit his/her P60. A P60 is given to you by your employer at the end of each year.

Other tax refunds

A tax refund may also be paid if you have purchased goods or services for which you can claim tax relief

Rates

Unemployed

The amount of tax refund will depend on:

• The length of time you have been unemployed
• The amount of tax you have paid
• The amount of tax credits you have used
• The amount of your weekly social welfare payment

How your tax refund is paid

If you are unemployed and due a tax refund Revenue will issue you a cheque.

How to apply

You should apply 4 weeks from the date you become unemployed, however, if emergency tax was being deducted by your former employer you should apply immediately.

You should apply 8 weeks from the date you became unemployed, if you are getting another income which is taxable, this includes taxable social welfare payments.

Your application for a tax repayment because you are unemployed or out of work sick, must be made on tax repayment Form P50 and sent to your district tax office with Parts 2 and 3 of your P45.

Where to apply

For further information on getting a tax refund, contact the Revenue Commissioners.

Use the Revenue contact locator to find the Lo-call number for your region.

You can find more detailed Revenue contact details for your region on the Revenue website.