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Chapter 3
Income Tax
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Earned income tax credit
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3. (1) The Principal Act is amended by inserting the following after section 472AA:
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“472AB. (1) In this section—
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‘appropriate percentage’, in relation to a year of assessment, means a percentage equal to the standard rate of tax for that year;
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‘qualifying earned income’ means earned income but does not include emoluments within the meaning of section 472.
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(2) Subject to subsection (3), where, for any year of assessment, a claimant proves that his or her total income for the year consists in whole or in part of qualifying earned income (including, in a case where the claimant is a married person assessed to tax in accordance with section 1017, or a civil partner assessed to tax in accordance with section 1031C, any qualifying earned income of the claimant’s spouse or civil partner deemed to be income of the claimant by either of those sections for the purposes referred to in the relevant section) the claimant shall be entitled to a tax credit (to be known as the ‘earned income tax credit’) of—
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(a) where the qualifying earned income (but not including, in the case where the claimant is a married person or a civil partner so assessed, the qualifying earned income, if any, of the claimant’s spouse or civil partner, as the case may be) arises to the claimant, the lesser of an amount equal to the appropriate percentage of the qualifying earned income and €550, and
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(b) where, in a case where the claimant is a married person or a civil partner so assessed, the qualifying earned income arises to the claimant’s spouse or civil partner, as the case may be, the lesser of an amount equal to the appropriate percentage of the qualifying earned income and €550.
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(3) Where the claimant is entitled to—
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(a) employee tax credit in accordance with subsection (4)(a) of section 472 and earned income tax credit under paragraph (a) of subsection (2), the aggregate of those tax credits shall not exceed €1,650, and
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(b) employee tax credit in accordance with subsection (4)(b) of section 472 and earned income tax credit under paragraph (b) of subsection (2), the aggregate of those tax credits shall not exceed €1,650.”.
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(2) Subsection (1) applies for the year of assessment 2016 and each subsequent year of assessment.
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