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Earned Income Relief

Earned Income Relief is for individuals who are gainfully employed or carrying on a trade, business, profession or vocation.
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Qualifying for Earned Income Relief

You will receive this relief if you have taxable income from any of the following sources in the previous year:

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Earned Income

This refers to the taxable earned income from employment, pension, trade, business, profession or vocation less allowable expenses.

 

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Amount of Earned Income Relief

The amount of relief (shown in the table below) is based on your age and taxable earned income in the previous year.

Your age as of 31 Dec of the previous year

*Maximum amount claimable

Below 55

$1,000

55 to 59

$6,000

60 and above

$8,000

*If the amount of taxable earned income is lower than the maximum amount claimable, the relief will be capped at the amount of taxable earned income.

 

For example, if you are 55 years old as at 31 Dec 2020 and have taxable earned income of $5,000 in 2020, you will get Earned Income Relief of $5,000 (instead of $6,000) for the Year of Assessment 2021.

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Earned Income Relief for Handicapped Persons

A higher Earned Income Relief (shown in the table below) will be given to those with permanent *physical or ^mental disability that severely affects their ability to work.

*Physical disability - requires assistance in any one of the following six Activities of Daily Living (ADLs): (1) Washing or Bathing, (2) Dressing, (3) Feeding, (4) Toileting, (5) Transferring and (6) Mobility.

^Mental disability - impaired in any one of the following three areas of activities: (1) Self Care and Activities of Daily Living, (2) Compliance to Psychiatric Treatment and (3) Education or Work.

 Your age as of 31 Dec of the previous year*Maximum amount claimable
 Below 55 $4,000
55 to 59  $10,000
60 and above  $12,000

*If the amount of taxable earned income is lower than the maximum amount claimable, the relief will be restricted to the amount of taxable earned income.

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Claiming Earned Income Relief

You do not need to claim this relief in your Income Tax Return as it will be automatically granted to you based on your eligibility.

First-Time Claim for Handicapped Earned Income Relief

Those claiming Handicapped Earned Income Relief for the first-time must complete and submit the Handicapped-Related Tax Relief form (243KB, DOC) by email.

You also need to complete your tax return as follows:

  • If you are e-Filing your tax return: Enter details of your handicap under Section “4. Deductions, Reliefs and Parenthood Tax Rebate” > “Earned Income Relief”.
  • If you are submitting a paper form: Enter details of your handicap in Appendix 2 of the Tax Form.

We will automatically grant you Handicapped Earned Income Relief in subsequent years if you are eligible. You do not need to enter your claim in your tax return in subsequent years.

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  • I have filed my tax return for the Year of Assessment (YA) 2021. This is my first time claiming Handicapped Earned Income Relief. What should I do if I have forgotten to claim the relief?

    Complete and submit the Handicapped-Related Tax Relief form (243KB, DOC) by email. In addition, please amend your filing as follows:

    (a) If you have filed your tax return online

    Re-file within 7 daysNew of your previous submission or by 18 Apr 2021, whichever is earlier. You can only re-file once.

    When you re-file, you must include all your income details and expenses, donations and relief claims, where applicable. Once you have re-filed successfully, your new submission will override the previous submission.

    If you could not re-file, please email us by stating your request to claim or revise the relief for YA 2021.

    (b) If you have filed a paper tax return

    Please email us stating your request to claim or revise the relief for YA 2021.