[Ireland] Why so many workers face 2020 tax bills

In Ireland, thousands of workers who benefited from State subsidies in 2020 could potentially receive bad news next week, as Revenue seeks to collect unpaid taxes that have arisen from the schemes. In common with other welfare payments like the State pension and maternity benefit, the Temporary Wage Subsidy Scheme (TWSS) is subject to both income tax and the universal social charge (USC). However, the subsidy was not subject to tax deductions through payroll when it was paid out to employees and this has given rise to a year-end tax liability.

The scheme was introduced in March 2020 to help employers impacted by the coronavirus pandemic. It refunded employers up to a maximum of €410 for each qualifying employee and ran until August 31. Its replacement - the Employment Wage Subsidy Scheme - does not have the same tax issues. The method in which the TWSS was paid will leave up to 660,000 workers facing tax shortfalls later this month. The tax bills will be unexpected by many. The Irish Times examines how this has come about.

In Ireland, thousands of workers who benefited from State subsidies in 2020 could potentially receive bad news next week, as Revenue seeks to collect unpaid taxes that have arisen from the schemes. In common with other welfare payments like the State pension and maternity benefit, the Temporary Wage Subsidy Scheme (TWSS) is subject to both income tax and the universal social charge (USC). However, the subsidy was not subject to tax deductions through payroll when it was paid out to employees and this has given rise to a year-end tax liability.

The scheme was introduced in March 2020 to help employers impacted by the coronavirus pandemic. It refunded employers up to a maximum of €410 for each qualifying employee and ran until August 31. Its replacement - the Employment Wage Subsidy Scheme - does not have the same tax issues. The method in which the TWSS was paid will leave up to 660,000 workers facing tax shortfalls later this month. The tax bills will be unexpected by many. The Irish Times examines how this has come about.