I’m still on leave and it’s nice to stay at home as a family recovering from the CNY visits. My wife is watching the Australian Open tennis, helper is cooking lunch and the baby is sleeping. A good time to post about this letter from IRAS that we received.
It was to notify us that we qualify for the Qualifying Child Relief (QCR), Working Mother’s Child Relief (WMCR) and Parenthood Tax Rebate (PTR) for the YA2020 – 1 Jan 2019 to 31 Dec 2019. Reason is because we now have a child and the Government knows it. Always convenient for IRAS to pick up on this and automate our qualification for the QCR, WMCR and PTR in the upcoming tax filing season.
The interesting thing about the letter is that IRAS split the QCR and PTR portions as 50% – 50% to keep the benefits equal between my wife and I. Only my wife qualifies for the WMCR. However, IRAS asked us to make changes to the proportion online on their Tax Portal if need be. Which can be difficult since we don’t have estimated figures from IRAS on the total earned income, deductions, reliefs and rebates that we already qualify for.
The good thing is we already did up our own estimated figures so we know how to optimise the proportion split of the QCR and PTR between my wife and I. Otherwise, this would have been inconvenient since we are not sure what the process is to make further changes to the proportion split later during the actual tax filing.
We amended the proportion split of the QCR and PTR to be 100% for my wife and 0% for me. She has a much higher earned income for YA2020 and it would be good to reduce it as much as possible with the reliefs and rebates. Even after this, her chargeable income and tax payable are still likely to be higher than mine but there’s not much else we can do to reduce it. Probably do more of the CPF cash top-up tax relief to her CPF SA.
Only QCR apportionment affects the nominal tax rebates that you will get since it is directly affected by the varying tax bracket. WMCR can only be claimed by wife and not open for apportionment (15% off taxable income). PTR is a net tax rebate (cash) that can be used to offset the final tax you need to pay, this means that there is no more savings regardless who takes the PTR.
Me and my wife split by 100% QCR to the higher bracket earner, WMCR no choice (only wife can get), PTR 50% each split.
My wife and I split the QCR 100% to the higher tax bracket earner like both of you as well. Good point about the WMCR only for the wife and I have amended my post to reflect this accordingly. As for the PTR, I decided to let my wife have the 100% benefit to offset it against her tax payable.