Taxation of the Pandemic Unemployment Payment (PUP)

Taxation of PUP received in 2020

During 2020, you did not pay tax on your Pandemic Unemployment Payment (PUP) when you received it from the Department of Social Protection (DSP). This ensured you could register for, and start to receive, PUP payments as quickly as possible. 

All 2020 PUP payments were taxable income even though that tax was not collected at the time.

All PUP tax liabilities for 2020 became due at the end of 2020.

The tax liability could be:

• collected interest free by reducing you tax credits over four years
• or
• where the liability is partially paid, the balance could be collected interest free over four years.

Note

All future refunds will be offset against any underpayment of tax due, or owing, under PUP, until it is fully collected.

In January 2021, Revenue made a Preliminary End of Year Statement available to you. Your Preliminary End of Year Statement shows:

• details of any income you received that was reported by your employer or employers
• the total amount of PUP you received
• a preliminary calculation of your Income Tax and Universal Social Charge (USC) for 2020
• whether your tax position is balanced, underpaid or overpaid, for the year.

What you need to do

You have an opportunity to bring your tax affairs up to date. You can do this by completing an Income Tax Return to:

• declare any additional income
• and
• claim any additional tax credits due such as qualifying health expenses or Remote Working Relief.

The additional information that you provide may change your final Income Tax or USC position.

What happens if you owe Income Tax or USC?

You can either fully, or partially, pay any Income Tax or USC liability through the 'Payments/Repayments' facility in myAccount.

Alternatively, Revenue will collect the full, or any remaining, liability interest free. This is done by reducing your tax credits over four years.

Next: Taxation of PUP received in 2021 and 2022