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Large increase in number of people who overpaid taxes, officials believe

According to Revenue, up to 366,000 households may be eligible for reimbursement after overpaying their taxes last year.

The projection applies to households that have not yet filed their 2021 tax returns.

According to experts, they may be delaying filing since they were faced with an unexpected extra bill for 2020 as a result of obtaining the pandemic unemployment payment (PUP).

However, hard-pressed households that unknowingly overpaid taxes for 2021 via the PAYE system may be eligible for refunds in the coming months, but they must complete their returns to find out.

Marian Ryan, consumer tax manager at Taxback.com, explained that households overpay taxes for a number of reasons, including changes in their circumstances such as marriage, divorce, or starting a new career. She also stated that some people may not be claiming tax breaks for which they are eligible, such as for remote working, medical expenditures, or non-routine dental bills.

They are overpaying taxes and are entitled to money back from Revenue because they are unaware of their rights.

According to Ms. Ryan, the rise in the number of persons who overpaid tax this year is most likely due to those who underpaid during the pandemic and are now disregarding their 2021 filings.

The 366,000 people who may be eligible for a refund this year are 100,000 more than last year.

“They are strange years, 2020 and 2021, because the great majority of individuals who would have received the wage subsidy or the PUP ended up with underpayments for a long time,” Ms. Ryan explained, implying that they owed Revenue more money than they believed.

These individuals may be “fearful” of submitting their returns in case of another underpayment through the PAYE system, when in fact they may have overpaid.

“They may put their heads in the sand and don’t want to deal with 2021,” Ms. Ryan explained, adding that businesses seldom make errors when taxing employees.

A Revenue spokesperson disputed that workers would be under pressure to handle refunds, claiming that the “vast majority” of returns are completed electronically and do not require Revenue personnel’s direct participation.

Figures reveal that 736,000 people are eligible for refunds from last year’s tax returns, a 33,000 increase over 2020. However, this is far fewer than the 846,000 people who overpaid in 2019.

Figures also reveal that 233,000 households underpaid their taxes last year, far fewer than the 402,000 expected in 2020.

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