Earned Income Relief

When you have a gainful employment or you’re operating a business/trade/vocation/profession, you’ll qualify for “Earned Income Relief” under specific criteria. You’ll be considered eligible to get this relief when you’ve taxable income through sources such as your pension, your employment, or via your trade/vocation/profession/business in the prior year.

“Earned income” is equal to the taxable income you’ve earned via your pension, employment, business, trade, vocation, or profession minus approved expenses.

How is the Relief Amount Computed?

It will depend on your age as well as the taxable income you’ve earned in the preceding year. The maximum amount you can claim is mentioned in the following table:

Your age last year (as of 31st December) From the 2013 YA (Year of Assessment)
Less than 55 years S$1,000
Between 55 and 59 years of age S$6,000
60 years and plus S$8,000

In case the taxable income you’ve earned is lesser in comparison to the maximum amount you can claim, the Earned Income Relief will be restricted to the taxable amount you’ve earned.

How to Claim for This Relief

If you qualify for the Earned Income Relief, you will be sanctioned with this relief automatically during the processing of your income tax return.

A Handicapped Individual can Claim for This Relief

For an individual who is suffering from a permanent mental or a physical disability (affecting their capacity to work) will be sanctioned with a higher relief amount. The maximum amount you (if handicapped) can claim is listed in the table below:

Age of the handicapped person in the previous year (as on 31st December) From the Year of Assessment 2013
<55 years S$4,000
From 55 years to 59 years S$10,000
60 years and above S$12,000

In case your earned taxable amount is lower when compared to the maximum claimable amount, the relief amount will be limited to the taxable amount you have earned.

What is the claim process for a handicapped person?

When you want to claim for the “Handicapped Earned Income Relief” for the 1st time, you should submit the completed “Handicapped-Related Tax Relief form” via email.

Additionally, you also have to complete your income tax return as per the following conditions:

  • If the paper Form B/B1 is submitted: The handicap details needs to be entered in the Form B’s or Form B1’s Appendix 2 and submitted along with your Form B or Form B1.
  • If you have done your tax return filing online: The handicap information needs to be entered under Section “4. Deductions, Reliefs and Parenthood Tax Rebate” > “Earned Income Relief”.

The Handicapped Earned Income Relief will be granted to you automatically in succeeding years if you qualify for it. There is no need for you to mention your claim in your income tax return for the following years.

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