“One, the child allowance that persons would have normally been claiming, $1,000, which is children up to 10 years, up to 10 years and up to 16, could have claimed $1,000 or $2,000. Now, all children up to school age, in primary school, secondary school, can claim up to $5,000 per child. If the child is attending university or attending a school providing equivalent to university education, they are entitled now to $10,000.”
The dependent relative allowance has also seen a substantial jump, moving from $350 to $5,000. Homeowners will also benefit. The mortgage interest deduction cap has increased from $18,000 to $40,000, excluding personal and medical allowances.
“Credit union shares were also capped at $5,000 and now that has gone up to $10,000. So, all of those increases are geared towards bringing further reduction to the amount of taxes that an employee would pay on a regular basis. Now, in terms of medical, there were some allowances that were not previously allowed. So, things like fertility treatment are now part of what people can now claim as an expense for medical.”
All investments made during the filing period can now be claimed up to $10,000 for both local and regional investments.
“The other thing that is important to some sectors of the nation is that pension income is now exempt. So, in earlier times, you would have filed a return and pension income was included up to a certain amount and the balance would have been taxed. But now, your existing entire pension income, whether you receive it from any sources, an approved pension fund, whether it be from the employer pensions or the government pensions or the NIC pensions, all of that now will be 100% exempt. So, pensioners now, only the income that they derive from new employment would be subject to tax as long as they fall within the taxable brackets.”
Taxpayers with questions are encouraged to contact the Inland Revenue Department directly for clarification during the filing period.
“As is customary, the IRD normally does outreach in terms of providing assistance to taxpayers. This year will be no exception. We will have our outreach programs. We’ll also have some tailored programs on air, where we’ll also provide further information to individuals. However, individuals are still free to call the department and ask about those changes. As we know, the legislation was recently adopted. So, now we’re in the process of disseminating that information. So, people will be hearing little ads from them and will also be seeing flyers, which will have that information. But if they do not still have an understanding of what it is all about, we can provide that level of assistance by calling our department at our customer service numbers, and we’ll be in a position to assist them in providing the kind of clarification that is needed by them.”
The Acting Deputy Comptroller says the changes are designed to ease the financial burden on families and workers. The changes took effect for the income year beginning January 1, 2025.