What is Incapacitated Child Tax Credit?

Incapacitated Child Tax Credit is a tax credit for parents of children with special needs who are paying tax as an employee or self-employed. The Revenue wants to acknowledge the additional cost borne by parents of children with additional needs by allowing them this extra credit.

How do you qualify for Incapacitated Child Tax Credit?

Your child with additional needs must show a lack of mental and/or physical ability that would make it difficult for them to manage their own personal care, property, or finances as an adult. A more accurate statement would be that your child should grow up and be unlikely to work to support themselves financially. If your child receives Domiciliary Care Allowance or Disability Allowance, then my recommendation is to apply.

What age must your child be before a parent can claim Incapacitated Child Tax Credit?

Once your child meets the qualifying criteria, there is no age restriction. Many parents assume that once their child turns 18, they have to give this credit up, but there is no age limit. If your child was born with their condition or was diagnosed before you became aware of this credit, then the Revenue may allow you to back claim up to 4 years, depending on the date of birth or diagnosis.

Who can claim?

In a family situation, one parent can claim this credit, or it can be split between both working parents if applicable. Where the child is maintained by one parent only, this parent is entitled to claim the total tax credit amount.

Parents who share custody can claim or transfer the credit provided financial support is present. The tax credit is split between them in proportion to the amount paid by each towards the general costs of maintaining the child.

If you are not the child’s biological parent, you can still claim the credit if you have custody of the child and maintain them at your own expense. Please complete the “Is any other person also maintaining this child” section of the form.

What is the rate of the Incapacitated Child Tax Credit in 2024?

Budget 2024 has increased the rate parents receive from €3,300 to €3,500 per child per year. If you have more than one child with additional needs, then a credit for each child is awarded.

What are the qualifying criteria?

The incapacity must be such that the child is unlikely to be able to maintain themselves even with the benefit of treatments, aids, appliances, medication or therapies. There must be a reasonable expectation that, if the child were over 18, they would not be able to support themselves financially by earning a living from working.

How to apply?

Two forms need to be completed. A parent must complete the Incapacitated Child Tax Credit Form ICC1 with their own details. You will also need to get Form ICC2 certified by your child’s doctor or consultant. This form is a professional declaration about your child’s ability to maintain themselves as an adult.

Both forms can be downloaded by clicking on the right side of the Revenue website.

Where to apply?

If you are a PAYE taxpayer, you can claim the credit online through Revenue’s MyAccount service. If you are self-employed, the credit is claimed by completing the ‘Incapacitated Child’ section on your annual tax return at the Revenue Online Service (ROS).

Does autism qualify for Incapacitated Child Tax Credit?

Lots of my families are unsure of their child’s future and would naturally hope their child will become independent. They are worried that if they claim the Incapacitated Child Tax Credit, they may have labelled their child “incapacitated”. Thinking it may cause issues in the future that has a negative impact on their child. In my 15 years of experience, I have never seen this happen; remember, all our abilities are fluid and changeable as we get older.

When it is unclear what the future will be, I recommend completing the form manually and posting it to the Revenue office with supporting documentation. This will allow the Revenue to make an informed decision and ease parents’ minds of future back paying of taxes.

What age does Incapacitated Child Tax Credit stop?

There is no age limit when parents need to stop claiming. If your child is an adult on Disability Allowance and you still meet the additional criteria, parents can continue to claim. If your child moves out of the family home on a full-time base and you no longer provide financial support, it is recommended that you contact Revenue to inform them of your change in circumstances.

Where do I go for further information?

You can read more about the Incapacitated Child Tax Credit on the Revenue website.