People in Kilkenny could be facing major tax bill
Those who received the Pandemic Unemployment Payment (PUP) or the Temporary Wage Subsidy Scheme (TWSS) during 2020 may be facing tax underpayments
Many people in Kilkenny may find themselves owing significant amounts to the Revenue due to untaxed Covid-19 payments, an expert has warned.
Those who received the Pandemic Unemployment Payment (PUP) or the Temporary Wage Subsidy Scheme (TWSS) during 2020 may be facing tax underpayments, as these supports were not taxed at source.
Martin Brennan, Director at Irish Tax Rebates (irishtaxrebates.ie), has cautioned that the underpayments could lead to a reduction in tax credits over the next four years, resulting in a higher tax bill for many residents.
He explained that the process of recovering the unpaid taxes has already begun for those who missed the initial deadline to settle their 2020 income tax returns.
"Back in June, the Revenue Commissioners began sending letters to those affected, setting a deadline of the 5th of August for any outstanding 2020 income tax returns," Brennan said. "For those that missed that deadline, the process of releasing those underpayments has begun, meaning those liable will pay a higher amount of tax over the course of the next four years, proving a considerably heavy burden for quite some time."
Brennan highlighted that while the deadline for 2020 returns has passed, it is still possible to reduce the impact by reviewing unclaimed expenses from that year.
He encouraged those affected to act quickly, as the Revenue's four-year rule means any opportunity to claim expenses for 2020 will disappear after January 1, 2025.
"Ensuring you keep receipts and staying on top of your taxes will ensure that when instances like this arise, you’re in a position to navigate your way around any potential reduction in credits and paying higher amounts of tax in the future," he added.
Kilkenny people impacted by the underpayment are urged to review their tax situation to avoid being hit with a larger bill down the line.