Identify the reliefs IRAS gives automatically and check that they were applied.
Two years ago, Shu Ting claimed Spouse Relief while her husband Marcus was doing a full-time master's degree and earning almost nothing. Last year Marcus started work at an engineering firm in Jurong on a full salary, yet this year's return showed Spouse Relief pre-filled as though nothing had changed.
Some reliefs on your return are given automatically. Others are copied forward from the previous year whether or not they still apply. You sign the return, so you are responsible for knowing which is which and checking each one before you submit.
Earned Income Relief is for people with income from work, such as a salary or trade income. You do not need to claim it. IRAS works it out from the income it already holds and adds it to your assessment. The amount goes up with age, so a worker in their late fifties gets more than a worker in their thirties, and it is higher for people with a disability. It can never be more than your earned income, which only matters if you earned very little in the year. IRAS sets the amounts and age bands, and the current figures are on its website. The only real check is that the relief appears. If you have a disability and the higher amount is missing, raise it with IRAS.
As an employee, you pay part of each month's salary into CPF as the employee contribution, and that part is not taxed. CPF relief equals the compulsory employee CPF contributions you made in the year, up to limits set by the CPF contribution rules. You do not claim it either. The CPF Board sends your contribution records to IRAS, and the relief is filled in from them. Your employer's compulsory CPF contributions for your Singapore employment are not taxable, so they do not appear as a relief. Voluntary CPF contributions your employer makes for that employment are different: they are taxable, so they count as your income. IRAS explains this tax treatment on its website.
CPF relief can still be wrong if you had more than one employer or an employer paid CPF late, because the figure may then differ from what was deducted on your payslips. To check it, add up the employee CPF lines on all your payslips for the year, including CPF on any bonus, and compare the total with the relief. Shu Ting did this with her 12 months of payslips plus the CPF from her bonus. The total came to S$14,800 (an invented example figure), which matched her notice, so she accepted it.
CPF relief covers compulsory contributions only. Voluntary contributions and cash top-ups are handled separately in Module 3, "Use CPF top-ups and stay under the relief cap".
Pre-filled reliefs are ones IRAS fills in because you claimed them before. Depending on the relief, IRAS may assume nothing has changed and fill in the same claim. That helps when nothing has changed. When something has, it can give you a relief you no longer qualify for or leave out one you now qualify for.
The reliefs most likely to need updating depend on other people's circumstances. Spouse Relief depends on your spouse's income. Child reliefs depend on the child's age and whether the child is studying. Parent Relief depends on where your parent lives and how much income they have. Marriage, a birth, a child finishing school, a parent moving in or out, and a parent passing away can all change what you should claim. Lesson 2.2, "Spouse, child and working mother reliefs", covers these reliefs and their conditions in detail.
A wrong pre-filled claim is still your claim, and submitting it tells IRAS you qualify. IRAS can review claims after the notice is issued, recover the tax, and add penalties if it decides the claim was careless. Correcting a claim before you submit takes about two minutes, while fixing it later takes much longer.
Shu Ting went through her return one relief at a time, asking of each: was this true for me in the calendar year being assessed? Reliefs follow the facts of that year, so a change in January of this year does not affect last year's return. Earned Income Relief was there automatically with the correct age band, and CPF relief matched her payslips.
Marcus had completed his NS in-camp training. NSman Relief for wives depends on conditions set by IRAS, so she checked those conditions rather than assume she qualified.
Spouse Relief has an income limit, published on the IRAS page. Marcus had earned a full salary for most of the year, well above that limit, so she removed the claim.
Removing a relief raises your tax by the relief's value, which is the relief amount times your marginal rate. You can work this out with the practice table in Lesson 1.4, "Rebuild your tax bill from scratch". Shu Ting's Spouse Relief was S$2,000 and her marginal rate was 10% (an example), so S$2,000 x 10% = S$200. Paying that S$200 now was much better than having IRAS find the claim later.
Open your return and go through it one relief at a time, asking whether each was true for you in the calendar year being assessed. Check that Earned Income Relief appears with the right age band and, if you have a disability, the higher amount. Compare your CPF relief with the total of employee CPF on all your payslips, including bonus CPF, and watch for multiple employers or late payments. For pre-filled reliefs that depend on family members (spouse, child, parent, NSman), check the current conditions on the IRAS site against what happened that year. Then remove claims you no longer qualify for and add ones you now qualify for, before you submit.
To start, open last year's return and list every relief it shows, with a mark beside any that might no longer fit.
Write down the reliefs that were pre-filled on your last return. Mark any that no longer fit your situation.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).