U.S. TAX GUIDE IN IRELAND
How does the Irish tax system affect Americans living there? 
In Ireland, the tax system operates on a calendar year, where you must calculate and pay your taxes yourself. This includes income tax, VAT (value-added tax), and corporation tax, with income tax being most relevant for individuals. This tax covers wages, rental income, pensions, and more.
The Irish Revenue Commissioners, also known as Revenue, manage the collection of these taxes.
Table of Contents
What makes you a tax resident in Ireland?
You become a tax resident in Ireland if you spend at least 183 days in the country within a single year or 280 days over two consecutive years.
Even if you don’t meet these day-count requirements, your intention to stay in Ireland can also influence your tax residency status.
As a tax resident, you must pay taxes on all your income worldwide. If you’re not a resident, you only pay taxes on income earned within Ireland.
How do US and Irish taxes work together?
The US-Ireland Double Taxation Treaty is in place to ensure that Americans living in Ireland don’t pay taxes on the same income twice.
For example, if you earn a salary in Ireland and pay taxes there, you can apply for tax credits on your US tax return for the taxes you paid in Ireland. This helps reduce your US tax liability, making sure you don’t pay double taxes on the same income.
What kinds of income are taxed in Ireland?
In Ireland, you’ll pay taxes on various types of income, including:
- Wages or salary from employment
- Income from businesses or professions
- Rental income from properties
- Investment income (like dividends)
- Foreign income
- Certain types of social welfare payments
To calculate your taxable income, add up all your earnings and subtract any allowable deductions, such as job-related expenses or healthcare costs.
What are the income tax rates in Ireland?
Ireland has two main income tax rates:
- 20% Standard Rate: This rate applies to income up to a certain limit.
- 40% Higher Rate: This rate applies to income above that limit.
The thresholds for these rates can vary based on factors like your marital status and whether you have dependent children.
Should I file my Irish or US tax return first?
It’s usually best to file your Irish tax return before your US tax return.
Doing this helps you figure out how much tax you’ve paid in Ireland, which you can then use as a Foreign Tax Credit on your US tax return to avoid double taxation.
Since Irish tax rates are generally higher than US rates, you may even have leftover credits for future use.
How do you submit an Irish income tax return?
The Irish tax year runs from January 1 to December 31. Your tax return is usually due electronically by November 15 of the following year, with a paper filing deadline of October 31.
You can file your return through the Revenue Online Service (ROS), a user-friendly online platform.
If you’re employed, taxes are typically deducted from your paychecks through the Pay-As-You-Earn (PAYE) system, helping you avoid a large tax bill at the end of the year.
What tax credits and reliefs are available in Ireland?
In Ireland, you can take advantage of several tax credits and reliefs, including:
- Personal Tax Credit: Available to all tax residents.
- Earned Income Credit: For those who are self-employed or have non-PAYE income.
- Age Tax Credit: For individuals aged 65 or older.
- Home Carer’s Credit: For married couples or civil partners where one spouse cares for a dependent.
- Medical Expenses Relief: Offers relief on certain medical expenses.
- Tuition Fees Relief: Provides relief on certain higher education costs.
