Pa Daly, Sinn Féin TD for Kerry, has urged the Government to issue a statement clarifying taxation on the Covid-19 pandemic payment.
“We are seeing a repeat of the situation last year when people became aware that the pandemic payment was liable for taxation much later in the year, and without any official notification from Revenue,” said Teachta Daly.
No Clarification From Revenue
“This fact was never clarified by Revenue until questions were raised by the public themselves after hearing whispers that they would be taxed on the payment.
“As my colleague, Pearse Doherty TD, subsequently highlighted, the Government could have avoided taxation for the period from March to August but they chose instead to rewind the clock and retrospectively apply tax from the date the PUP was introduced.
Tax Implications For 2020
“Now we are seeing a replay of sorts where the tax implications for 2020 were clarified, but the rules changed for 2021.
“Revenue’s website is clear: tax for the pandemic payment will commence via amended tax credits starting in 2022 and can be spread over a period of four years.
“Nowhere is 2021 mentioned however I am now hearing from multiple constituents who are being taxed at source, in 2021, for 2021 PUP.
Net Incomes Reduced
“Where a couple is jointly assessed for example, and one person is on the PUP with the other working, tax credits have been reduced to allow for taxation of the PUP.
“It is also now dawning on people that when they do return to work, hopefully in 2021, that they will face reduced net income this year due to tax credits.
People Caught Unaware
“No one disputes the fact that the payment is taxable, however, this method and timeline for 2021 has been introduced without any communication and people have been caught unaware.
“All I am asking for is clarification so people know where they stand and can budget accordingly,” said Teachta Daly.
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