You may be able to claim tax relief on the additional costs of working from home, including electricity, heat and broadband.
Contents
COVID-19 and e-working
Budget 2021
How do I know if I qualify?
How to apply
How much can I claim?
What expenses can I claim?
Should I pay tax on equipment from my employer?
Capital Gains Tax
I am a cross border worker, am I eligible?
COVID-19 and e-working
The COVID-19 emergency has had a big impact on working life in Ireland. Throughout the country organisations are asking staff where possible to work from hometo prevent the spread of the virus.
If you have been asked to work from home because of the COVID-19 emergency, you may be able to claim tax relief against the cost of home expenses.
Budget 2021
It was announced in Budget 2021 that the following expenses will be covered as an allowable home expense for e-working tax relief. This begins in the tax year 2020 and applies for the duration of the COVID-19 pandemic:
30% of broadband costs for days worked at home.
Other vouched expenses where they are “wholly, exclusively and necessarily” part of your work.
You can only claim for these expenses if your employer does not already make payment towards the expense.
How do I know if I qualify?
E-working is where you work from home for substantial periods on a full- or part-time basis.
To qualify as an e-worker, you must:
Have a formal agreement with your employer that you are required to work from home.
Be required to perform essential duties of employment at home.
E-working involves:
Working for substantial periods at home.
Logging onto a work computer remotely.
Sending and receiving email, data or files remotely.
Developing ideas, products and services remotely.
You are not entitled to claim tax relief if you bring work home from the office outside of normal working hours, for example in the evenings or at weekends. More information on the eligibility criteria is available inRevenue’s Tax and Duty manual (pdf).
Select the Income Tax return for the relevant tax year.
In the ‘Tax Credits and Reliefs’ page (Page 4 of 5) select the ‘Your job’ tab. Select ‘Remote Working Expenses’ and insert the amount of expense at the ‘Amount Claimed’ section.
You must be able to account for each expense you intend to claim. This means keeping a record of all receipts and bills. You should keep all documentation relating to your claim for 6 years from the end of the tax year to which the claim relates. You may also need a letter from your employer stating that you work from home.
How much can I claim?
You may have extra costs when you are working from home including heating, electricity and broadband costs. Your employer can pay you a contribution towards these costs or you can make a claim for tax relief at the end of the year.
If your employer pays you an allowance towards these expenses, you can get up to €3.20 per day without paying any tax, PRSI or USC on it. If your employer pays more than €3.20 per day to cover expenses, you pay tax, PRSI and USC as normal on the amount above €3.20. You should note that employers are not legally obliged to make this payment to their employees.
If your employer does not pay you an allowance for your expenses, you can make a claim for tax relief at the end of the year. You will get money back from the taxes you paid.
If you share your bills with someone else, the cost is divided between you, based on the amount paid by each person – see Example 2 below.
Your refund of tax is based on:
How many days you worked from home.
The cost of the expenses.
Revenue’s agreed rate for calculating the cost of running a home office.
Revenue’s rate for the cost of running a home office is 10% of the cost of electricity and heating. This means that you can claim 10% of the total amount of allowable utility bills against your taxes. You can also claim 30% of broadband costs for the tax year 2020. This applies for the duration of the COVID-19 pandemic.
You can only claim for the days that you work from home. This does not include times you may have brought work home to do outside your normal working hours.
If your employer pays you an allowance towards your expenses, the amount paid is deducted from the amount you can claim back from Revenue.
What expenses can I claim?
Tax relief on e-working covers the additional costs of working from home. This includes:
Heating
Electricity
Broadband
Other vouched expenses where they are “wholly, exclusively and necessarily” part of your work.
Should I pay tax on equipment from my employer?
If your employer gives you equipment that you need to do your work, like a computer or printer, and you mainly use it for work, it is not considered a benefit in kind. This means that you do not have to pay any tax for receiving the equipment from your employer.
Capital Gains Tax
If you use only part of your home for e-working, your home remains your Principal Private Residence and you are not liable for CGT when you sell it. You can getmore information from Revenue.
I am a cross border worker, am I eligible?
If you are a cross border or frontier workeremployed in the Republic of Ireland and normally resident in Northern Ireland, and you meet the other eligibility criteria, you can also claim tax relief on e-working.
