Income tax credits and bands widened

Tax: An estimated 32,600 low-income earners will be kept out of the income tax net next year following an increase in the tax…

Tax:An estimated 32,600 low-income earners will be kept out of the income tax net next year following an increase in the tax credits announced by the Minister for Finance this afternoon.

Mr Cowen said tax credits for single workers will increase by €70, and by €140 for a married couple, raising the entry point to the income tax system from €17,600 to €18,300 per annum.

He said employee PRSI and health-levy entry points would also be increased in line with these changes.

The 20 per cent standard income tax band will be widened by €1,400 to €35,400 in a move that Mr Cowen said was to protect "people on average earnings from any liability to tax at the higher rate".

READ MORE

For one-income married families, the band has been widened €44,400 and for married two-earners, the new rate will be €70,800.

The Tánaiste has also widened other personal tax credits. These changes will see the tax credit for an incapacitated child rise 22 per cent or €660 per annum to €3,660, and the level of the married personal credit and the home carer tax credit are being increased by almost 17 per cent to €900 per annum.

From January 21 stthe PRSI contribution ceiling will increase from €48,800 to €50,700 and the weekly PRSI threshold will increase from €339 to €352.