Tax and the Pandemic Unemployment Payment
While recipients receive this payment gross (without the deduction of income tax), this is a taxable payment.
So how/when will you pay the tax owed on this payment. At the end of the year, Revenue will send you a preliminary end-of-year statement, outlining what Revenue understands your income to have been during 2020 from all sources. This end of year statement known as a Form P21 will indicate how much tax is owing.
Revenue has said that any tax owed will be collected over the following year (or years) by adjusting your tax credits, so you will not be expected to find a lump sum to pay the tax bill but you will be paying more tax on an ongoing basis until the bill is paid. Should you wish to make a payment instead of having your tax credits reduced, you can of course make the payment to the Collector General’s office.
If you have any queries re your tax affairs, Eolas Money are happy to help. Contact us at firstname.lastname@example.org or visit our website www.eolasmoney.ie