As part of Budget 2016 a new “Earned Income Tax Credit” will be introduced from January 2016. The new Tax credit is for self-employed individuals who are trading as a sole trader, partnership or business owners, who are not eligible for the PAYE Tax credit on their salary income. The Earned Income Tax Credit is €550 per year.
The earned income credit was introduced to bridge some of the gap created by the €1,650 PAYE tax credit that is unavailable to the self-employed. It is hoped to be increased in “future budgets”, the minister indicated.