Here is one tax credit that not may people are aware of – Medical Insurance Tax Relief.
Some 2.3 million people in Ireland are current subscripting to Private Health Insurance.
Most subscribers are either paying their health insurance premiums directly to their health insurer or though there salary/wage deductions at work, in this case you are automatically receiving the Tax Relief at Source (TRS).
HOWEVER employees take note where you’re EMPLOYER pays or partly pays for your Medical Insurance, the Tax Relief at Source has not been given on this. What you can now is make a claim for this tax relief and it is given at the standard rate of 20% and you can go back 4 years to claim for this if applicable.
How does it impact on the employee’s entitlement to Tax Credits? This is best answered by way of examples below:
Example 1
The employer pays the full Medical Insurance for the Employee.
The renewal notice received by the Employer shows the net premium due of €1600 (gross amount €2000). The employer pays the Net premium to the Insurer and pays the balance of the gross amount to Revenue (€400)
The employee has not received the benefit of the TRS on this. The employee is entitled to claim a tax credit of €400 (€2000*20%) on his/her tax certificate.
Example 2
The employer pays half the medical insurance premium for the employee.
The renewal notice received by the Employer shows the net premium due of €1600 (gross amount €2000). The employer pays the total Net premium to the Insurer and pays the balance of the gross amount to Revenue ( €400).
The employee pays €1000 to the employer in respect of one half of the premium.
The employee has not received the benefit of the TRS on this. The employee is entitled to claim a tax credit of €400 (€2000*20%) on his/her tax certificate.
In the Wednesday Club this week we spoke about one tax credit that not may people are aware of – Medical Insurance Tax Relief.
Some 2.3 million people in Ireland are current subscripting to Private Health Insurance.
Most subscribers are either paying their health insurance premiums directly to their health insurer or though there salary/wage deductions at work, in this case you are automatically receiving the Tax Relief at Source (TRS).
HOWEVER employees take note where your EMPLOYER pays or partly pays for your Medical Insurance, the Tax Relief at Source has not been given on this. What you can now is make a claim for this tax relief and it is given at the standard rate of 20% and you can go back 4 years to claim for this if applicable.
How does it impact on the employee’s entitlement to Tax Credits? This is best answered by way of examples below:
Example 1
The employer pays the full Medical Insurance for the Employee.
The renewal notice received by the Employer shows the net premium due of €1600 (gross amount €2000). The employer pays the Net premium to the Insurer and pays the balance of the gross amount to Revenue (€400)
The employee has not received the benefit of the TRS on this. The employee is entitled to claim a tax credit of €400 (€2000*20%) on his/her tax certificate.
Example 2
The employer pays half the medical insurance premium for the employee.
The renewal notice received by the Employer shows the net premium due of €1600 (gross amount €2000). The employer pays the total Net premium to the Insurer and pays the balance of the gross amount to Revenue ( €400).
The employee pays €1000 to the employer in respect of one half of the premium.
The employee has not received the benefit of the TRS on this. The employee is entitled to claim a tax credit of €400 (€2000*20%) on his/her tax certificate.
How much of a refund for medical insurance?
what difference can this make? An average premium paid of €1,000 over 4 years will mean you are due a refund of €800. Not a bad starting point while we look at your taxes for other refunds due!
Your Questions
If you have any questions for the Wednesday Club, leave a comment here or email refunds@redoaktaxrefunds.ie
were do i get the form for this as my employer pays part of my medical insurance.
looking forward to hearing from you,
theresa
Hi Theresa,
There is no form per se for this, not like you have for some other credits. But It can we claimed as part of a tax return or by letter.
We check this as normal as part of our tax assessment – you can see it on our application form
Best wishes,
John
were do i get the form for this as my employer pays part of my medical insurance.
+1
Hi, Do you need to inform the revenue each year about this insurance relief, if the cost of insurance my employer pays goes up? Last year it 700 but now my husband is included on the policy(company pays 75% for all family members) its 1400.
HI Yvonne,
You should let revenue know then, they usually just carry the previous years amount forward until you tell them otherwise.