1. Income Levy General Provisions
1.1 What is the income levy?
The income levy, which came into effect on 1 January 2009, is a levy payable on gross income, including notional pay, before any relief for any capital allowances, losses or pension contributions.
1.2 Who is liable for the income levy?
All individuals are liable to pay the income levy if their gross income exceeds the threshold of €15,028 p.a., (€289 per week) or if they exceed the income exemption limit of €20,000 p.a. for an individual aged 65 or over.
In the specific circumstances where an employer or pension provider has already applied the higher exemption limit of €352 to weekly payments made prior to 1 May 2009 (using the annual threshold of €18,304 as set out in the Finance (No. 2) Act 2008) Revenue will not seek to recover any underpayment of levy for this period arising as a result of the application of this higher exemption. This special provision only applies in respect of payments actually made in the period between 1 January 2009 and 30 April 2009.
1.3 Are there exempt categories?
Yes.
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Where an individual’s total income for a year does not exceed €15,028 p.a.*
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Full medical card holders – see section 2.4
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Social welfare payments are also excluded
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Individuals aged 65 or over whose annual income does not exceed €20,000
At the end of the year, a refund of any income levy paid will be due from Revenue where a married couple:
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is taxed under joint assessment, and
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one or both of whom are aged 65 or over in the year, and
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has combined gross income from all sources of less than twice the single threshold (2 x €20,000)
See section 2.3 and 2.21
*In the specific circumstances where an employer or pension provider has already applied the higher exemption limit of €352 to weekly payments made prior to 1 May 2009 (using the annual threshold of €18,304 as set out in the Finance (No. 2) Act 2008) Revenue will not seek to recover any underpayment of levy for this period arising as a result of the application of this higher exemption. This special provision only applies in respect of payments actually made in the period between 1 January 2009 and 30 April 2009.