People aged 65 and over are subject to the same general tax rules as everyone else but they do get higher exemption limits and some extra tax credits.

In general, if you are taxed exclusively under PAYE (this includes people whose non-PAYE income is taxed by having it coded into their determination of tax credits, you are not obliged to make an annual return.

If you are not taxed under PAYE, i.e. you are taxed under the self assessment system, you are obliged to make an annual return by October 31st of each year

Tax Exemption Limits

Exemption limits are income limits below which no tax is payable.

Annual exemption limits for 2008 and 2009

Status	Aged 65 and over
Single/Widowed person	€20,000
Married Couple	€40,000
First two children	€575 each
subsequent children	€830 each

If you expect that your income for the year will be less than these limits, you should contact Revenue and they will issue a revised determination of tax credits to you. If your income is not much above these amounts, you may get what is called “marginal relief“. That means that you do not go back into the normal tax system – instead you pay tax at a rate of 40% on the amount by which your income exceeds your relevant exemption.

The point at which marginal relief ceases to be of benefit varies with your family circumstances and the tax credits to which you are entitled.