Income spreading – you can claim a deduction for a large lump-sum income
You can claim income spreading if these conditions are met:
- During the year, you have received at least €2,500 in earned income as a lump sum, but this amount has been accrued over two or more years.
- The earned income paid to you in the form of a lump sum comprises at least 1/4 of your entire earned income during the year.
Example: Wages for March–August 2021 were paid in one go at the end of August. Income spreading cannot be used because the wage income was not earned over two or more years.
How to request income spreading
Income spreading has to be requested separately. You can request income spreading to be calculated for your tax card or you can claim it in your tax return. You will not be granted income spreading if it is not beneficial to you.
To request income spreading, you need
- your latest payslip
- an account of your other income and the taxes withheld on them
- an estimate of your income during the rest of the year, specified by income type
- proof of the lump-sum payment and its grounds (such as a contract) provided by the payor.
You can request income spreading in MyTax. You can also visit a tax office or send us the required documents by post. You cannot be granted income spreading over the phone.
If you request income spreading for your tax card, it will also be included in your next pre-completed tax return.
Make the request before the end of your tax assessment for the year in which you received the lump sum. The end date of your tax assessment is stated in your tax decision.
Example: You have received income in 2021 that entitles you to income spreading. You must make a request for income spreading before the tax assessment for 2021 ends.
How to use MyTax to claim the spreading
Tax card and prepayment request:
- First, go to Other income.
- Scroll down to Show more...
- Then, scroll the page down until you see the Lump-sum income line. Now, click on Yes.
- Specific fields for wage income, income from seafaring, pension income, and other earnings appear. Enter the sum you receive in the appropriate field.
- The sum must be high enough. After you enter the lump sum, the question Do you request income spreading of a lump sum? appears. Select Yes.
Your Pre-completed tax return in MyTax:
- First, go to Other deductions.
- Scroll the page down until you see the Claim for income spreading line. Now, click on Yes.
- Answer either Yes or No to the “Are you adding further information to the claim as an attachment” question.
- After you answer Yes to the question, you can add an attachment file to your claim.
How does this affect my tax assessment?
Income spreading results in a tax credit that is directly deducted from your taxes.