Analysis: Thousands of taxpayers are missing out on refunds by not availing of tax credits for medical expenses, rent and college tuition fees
By Elaine Doyle and Brendan McCarthy, UL
While Benjamin Franklin once famously wrote "in this world nothing can be said to be certain except death and taxes", certainty is not the only thing these two have in common. Among other things, the tax world possesses its own reaper-like character, often manifesting in the shape of the dreaded "Tax Man". The prospect of having to engage with this looming spectre can create an understandable anxiety in the collective consciousness, an anxiety that is often exacerbated by the tax system itself.
In Ireland most employees (whose only income source is their salary) manage to avoid ever having to engage directly with the Tax Man, namely the Revenue Commissioners. Our income tax bills are calculated and collected by our employers through payroll and passed directly to Revenue. In the past, we would have received a physical payslip, leading us to scratch our heads as to what the various figures meant.
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From RTÉ Radio 1's Today with Claire Byrne, could you be due a tax refund?
In these digital times, we seldom see any tax calculation detail, making the thoughts of engaging with Revenue even more anxiety-inducing. Fearful of the possibility of owing even more tax, we often leave well enough alone lest any contact with Revenue cost us more money.
But there may well be a financial downside to this lack of engagement with Revenue. While most employers will have enough information to allocate the correct personal tax credits to their employees, some tax credits are dependent on payments made by the taxpayer themselves. As these won’t be reflected in payroll calculations, taxpayers must apply for these extra credits, or risk leaving money behind in the form of potential tax refunds. Here are three of the most underutilised tax credits.
Medical expenses
Many taxpayers miss out on the tax credit for medical expenses paid for themselves, their spouse, their children or other persons. Expenses include not only payments for GP visits and prescriptions but also physiotherapy or orthopaedic treatments prescribed by a doctor, treatment in a hospital or approved nursing home, maternity care, educational psychological assessments and speech and language therapy services for children, among others.
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From RTÉ News, Revenue says over 500,000 Irish tax payers are missing out on tax refunds
Tax relief is granted in the year in which the expenses are paid and amounts to 20%. It's important to note that relief is not available for any expenses that are reimbursed by the taxpayer’s health insurer.
As an example, if a taxpayer incurred €1,200 in qualifying medical expenses over the tax year paying for several GP visits, an appointment with a consultant, and filling numerous prescriptions at their local pharmacy, and was reimbursed €300 from VHI, they would be entitled to a tax refund of €180 (i.e., €1,200 - €300 = €900 @ 20%).
Rent paid
Another tax credit with which taxpayers may be unfamiliar is the credit for renting your home (this includes the rent you pay for your child so they can attend an approved college course). Various eligibility conditions need to be met, and the credit is not available if you are already receiving housing supports from the Government.
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From RTÉ Radio 1's Brendan O'Connor Show, money coach Kel Galavan explains what may be owed to you and how to claim it.
It is certainly worth taking the time to check eligibility for the rent credit in the context of rising rents and escalating costs of living. For the years 2026 to 2028, the rent credit for married couples and civil partners is €2,000 while single persons are entitled to a rent credit of €1,000.
College tuition fees
Tax relief is also available in respect of tuition fees. This applies to fees paid by a person on their own behalf or on behalf of another person for a college course (undergraduate programmes lasting at least 2 years and postgraduate programmes of at least one year which are included on a list approved by the Minister for Education and Science). There are some restrictions – the first €3,000 is ignored for full time courses while the first €1,500 is ignored for part time courses – and the maximum relief allowable is capped at €7,000 per course per student.
If a taxpayer paid €6,800 in tuition fees for their daughter to do a one year full-time postgraduate course at the University of Limerick (always an excellent choice), they would be entitled to a tax credit of €760 (i.e., €6,800 less the first €3,000 = €3,800 @ 20%).
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From RTÉ Radio 1's Today with Claire Byrne, personal finance expert Eoin McGee on what you can and cannot claim back from the taxman
How I claim these tax credits?
Claiming these credits is relatively straightforward through the Revenue’s myAccount facility. Once logged in, you have an option to ‘manage your tax for the current year’ with the ability to ‘add new credits’. You can claim credits for prior years (by selecting the ‘Review your tax for the previous 4 years’ option) and can request a ‘Statement of Liability’ by selecting ‘Complete Income Tax Return’ and completing the ‘Tax Credits and Reliefs’ section of the form.
By adding tax credits early in the tax year, your tax details should be altered through your employer, and any reduction in tax should be reflected in your weekly or monthly payroll. Tax credits claimed in respect of earlier tax years will result in a tax refund from Revenue of the excess tax paid in that year.
Certainty in tax, much like certainty in death, often does little to dispel anxiety, but claiming a tax refund should not be a fear-inducing exercise. Anxious taxpayers should remember that they are simply claiming money they overpaid during the year. Moreover, with ever-improving, user-friendly online services available to them for making their claim, they can rest easy knowing they may never need to face down the dreaded "Tax Man" at all.
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Prof Elaine Doyle is a Professor of Taxation in the Department of Accounting & Finance in the Kemmy Business School in the University of Limerick. Dr. Brendan McCarthy is an associate professor for the Department of Accounting & Finance in Kemmy Business School in the University of Limerick.
The views expressed here are those of the author and do not represent or reflect the views of RTÉ
