What is Earned Income Tax Credit (EITC) in Ireland?

Introduced in Ireland in 2016, the Earned Income Tax Credit (EITC) is a valuable relief for self-employed individuals, proprietary directors and others whose income doesn’t qualify for the full PAYE (Employee) Tax Credit.

Following Budget 2026, the maximum credit remains unchanged at €2,000 for a single person and €4,000 for married couples or civil partners.

The information provided here is for informational and educational purposes only and does not constitute tax advice. You should consult with a qualified tax professional or adviser regarding your individual tax situation. Tax laws and regulations are complex and subject to change, and the information provided may not be applicable to your specific circumstances. We are not liable for any tax decisions or actions you take based on this information.

Earned Income Tax Credit (EITC) is designed to support self-employed individuals and those earning supplementary income outside of traditional employment. It specifically targets those generating income from their trading or business activities. Earned income credit is one of several tax credits in Ireland that help to reduce the amount of income an individual pays for tax.

Introduced in January 2016, the EITC was created to alleviate the tax pressure on those with non-PAYE income. The goal is to bring the taxation of non-traditional employment in line with that of PAYE employees. By doing so, it acknowledges the valuable contributions of individuals running their own businesses or operating outside the PAYE system.

One key distinction of Earned Income Tax Credit in Ireland is that it is specifically available to self-employed individuals, unlike Employee Tax Credit. As a result, it levels the playing field in the Irish tax system, as it means everyone has access to tax relief, regardless of what kind of employment they have.

Earned income is the money individuals make from active work. This includes wages and salaries from employment, as well as profits from self-employment or running your own business. In Ireland, earned income is classified under Class I and II tax categories: Case I applies to profits from trades, while Case II covers income from professions. Earned Income Tax Credit also applies to salaries earned by proprietary directors, which includes business owners and their spouses or civil partners.

What doesn’t qualify as earned income: Earned income does not include passive income sources, such as rental income, dividends, or interest from savings. This is because they don’t stem from active work. Earned income credit is designed specifically for those who are actively contributing to their financial growth through their trades or businesses.

The credit directly reduces your income tax liability. For 2026, you can claim 20% of your qualifying earned income, up to a maximum of €2,000.

This means if you earn €10,000 or more from self-employment, you’ll receive the full €2,000 credit.

No changes to the rate or calculation were announced in Budget 2026.

You can easily submit your claim for Earned Income Tax Credit through the Revenue website’s myAccount service. This service lets you claim the tax credit not only for the current year but also for previous years. If your claim results in an overpayment, you’ll receive a refund, which typically goes directly to your bank account or whichever method you have filed with Revenue.

To track the status of your claim, simply log in to myAccount and check your tax profile. If you’re entitled to the EITC, you should see your tax refund processed within a few weeks.

Another way to claim the earned income credit in Ireland is by filing your self-assessment tax return. If you’re self-employed or run a business, you can include your claim for the EITC when submitting your Form 11 tax return at the end of the year.

Yes, you can qualify for both, but the total you claim across both credits cannot exceed €2,000. If you already receive the full PAYE (Employee) Tax Credit, you won’t gain any extra through the Earned Income Credit.

Here is how this would look in practice, using the example of Liam, who qualifies for both tax credits.

In 2025, Liam had a salary of €8,000 from his part-time job and a small profit of €4,000 from his freelance graphic design business.

In this case, he would receive an Employee Tax Credit on the salary of €1,600 (€8,000 x 20%) and an Earned Income Tax Credit of €800 (€4,000 x 20%), giving a total of €2,400.

However, the maximum tax credit he can claim between the two is €2,000, so the Earned Income Tax Credit is now limited to €400.

Final claim:

Employee Tax Credit: €1,600

Earned Income Tax Credit: €400

Total claim: €2,000

With Budget 2026 leaving personal-tax credits unchanged, now could be a good time to review how your money is working for you. Whether your income has increased, stayed the same, or you’re planning ahead for next year’s changes, finding a better home for your savings can make a meaningful difference. Compare fixed term deposits from trusted European partner banks on our marketplace, and make your money work harder — whatever your circumstances.