{"id":11765,"date":"2025-11-19T13:45:00","date_gmt":"2025-11-19T11:45:00","guid":{"rendered":"https:\/\/seoblog.taxback.com\/?p=11765"},"modified":"2025-11-20T08:15:04","modified_gmt":"2025-11-20T06:15:04","slug":"what-is-the-earned-income-tax-credit-and-how-does-it-work","status":"publish","type":"post","link":"https:\/\/www.taxback.com\/blog\/what-is-the-earned-income-tax-credit-and-how-does-it-work\/","title":{"rendered":"What Is the Earned Income Tax Credit and How Does It Work?"},"content":{"rendered":"

What is the Earned Income Tax Credit all about?<\/p>\n

To help level the playing field between the taxation of the self-employed and that of PAYE workers in Ireland, the credit is separate to the Employee Tax Credit in that it can also be claimed by people who are self-employed.<\/p>\n

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The Irish Government had previously said its intention was to bring this credit up to the same level enjoyed by PAYE workers at \u20ac2,000 in 2025.<\/p>\n

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Income that qualifies for the credit includes:<\/strong><\/h2>\n

Trading income (Case I and II)\u00a0and\u00a0<\/strong>Pay earned by proprietary directors.<\/p>\n

The credit isn’t available against your passive or investment income, such as:<\/strong><\/h2>\n

rental income or <\/strong>deposit interest income.<\/p>\n

The credit available is the lower of:<\/strong><\/h3>\n

\u20ac2,000 or\u00a0<\/strong>20% of your qualifying earned income.<\/p>\n

So, if you run your own business or trade, you should be able to claim the credit at the end of the year on your Form 11 tax return.\u00a0<\/strong><\/p>\n

Earned Income Tax Credit Rates<\/strong><\/h2>\n\n\n\n\n\t\n\n\t
2025<\/th>2024<\/th>2023<\/th>2022<\/th>2021<\/th>\n<\/tr>\n<\/thead>\n
\u20ac2,000<\/td>\u20ac1,875<\/td>\u20ac1,775<\/td>\u20ac1,700<\/td>\u20ac1,650<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

The amount of credit you can get also depends on your earned income.<\/p>\n

As a self-employed person, you must pay income tax under the self-assessment system and you should always keep proper records of:<\/strong><\/p>\n