Earned Income Credit: €2,000 if you work for yourself

If you are self-employed, or a proprietary director, there is a tax credit worth up to €2,000 a year that exists purely because you do not get the PAYE credit an employee gets. It is called the Earned Income Credit, and it has existed since 1 January 2016.

It is not a payment. It comes off the income tax you owe, euro for euro. And because Revenue lets you go back four years, someone who has never claimed it can be owed several thousand euro in one sitting.

What it is, and why it exists

An employee gets the Employee (PAYE) Tax Credit, worth a maximum of €2,000 in 2026. For years, somebody who worked just as hard for themselves got nothing equivalent. The Earned Income Credit was introduced in 2016 to close that gap, and it is now at the same €2,000 maximum.

Revenue describes it as a credit "allowed in respect of the pay that you earn", and says plainly that it "is a separate credit to the Employee Tax Credit in that it can also be claimed by people who are self-employed".

Which income counts

It is about earned income — money you worked for.

• Self-employed earned income
• Pay earned by proprietary directors

And it is not available against money that arrives without you working for it. Revenue names two: rental income and deposit interest income. A landlord with no trade does not get this credit.

Revenue also lists who can claim it: a proprietary director, the spouse or civil partner of a proprietary director, a child of a proprietary director, or somebody in receipt of trading profit or other foreign income.

How much you actually get

The credit is the lower of €2,000, or 20% of your qualifying earned income.

That second half is the one people miss. Twenty per cent of €10,000 is €2,000, so earned income of €10,000 or more gets the full credit. Below that it is capped: €5,000 of trading profit gives €1,000, not €2,000.

One more limit worth knowing before you plan around it: this credit cannot be transferred to your spouse or civil partner. It belongs to the person who earned the income.

How to claim it — and the four years behind you

For the current year: sign into Revenue myAccount, click "Manage your tax for the current year" in PAYE Services, then "Claim tax credits".

For the previous four years, which is where the lump sum is:

1. Sign into myAccount and click "Review Your Tax for the previous four years" in PAYE Services.
2. Request a Statement of Liability for the year you want.
3. Click "Complete Income Tax Return".
4. On the "Tax Credits & Reliefs" page, select "Your job" and add the Earned Income Credit.
5. Complete and submit. Repeat for each year you were trading.

If you file a Form 11 as a self-assessed taxpayer, the credit is claimed there instead.

Common questions

This guide is general information, not financial advice. Rules, rates and eligibility change and differ by country — always confirm the current details with the relevant official body before you act.

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