Deduction codes 501 and 503 in the 2-NDFL certificate: decoding

Business lawyer > Accounting > What is deduction code 501: features of reflection in certificate 2 – personal income tax

The legislation provides for personal income tax (NDFL). It is calculated as a percentage of the wages of officially employed workers minus the tax benefits provided. The Tax Code has approved certain codes for each type of income and deductions. The deduction code 501 also has its own characteristics. We will talk about it in this article.

Features of tax deductions

Only an officially employed person who is a resident can apply for a tax benefit. He must receive a salary and pay tax on it in the amount of 13%.

A tax deduction is an amount that reduces total income, forming the final tax base. Sometimes this concept refers to the return of part of previously paid tax. For example, when purchasing residential real estate, training or treatment. In this case, you can not return the entire amount, but only the money that was paid to the budget.

The employer annually generates a special form of certificate for all employees and sends it as a general report to the inspectorate. In addition, the employee himself may need it; the accountant is obliged, upon the employee’s application, to issue it within three days. When dismissing a person, the employer must also issue this document along with the work book.

The title of the certificate determines its content. It contains information for the year on a monthly basis.

Approved Revenue Codes

For convenience and uniform reflection of income in accounting and tax accounting, certain codes are used. In certificate 2 - personal income tax, separate cells indicate codes by which you can determine the name of the earnings received. The classifier approved by law includes codes consisting of four digits. All income is distributed by codes from 1010 to 4800.

Quite often, when assigning a code, an accountant may doubt the correctness of the chosen cipher. Then they assign it to code 4800. There are no penalties in the law for incorrectly assigning income in certificate 2 - personal income tax. However, this does not mean that codes do not need to be given attention. Different types of income have their own individual code. Incorrect classification may lead to a distortion of the tax base. Accordingly, the tax will be calculated incorrectly.

There are several basic income codes that are used by employers:

2000 - salary
2012 - vacation pay
2300 - disability benefits
2400 — rental profit
2760 - financial assistance from the enterprise
2720 - gifts
2730 - prizes
4800 - other income

If the directory does not contain the required code for attributing income, it should be designated as code 4800.

It is important to correctly attribute income according to the codes; this will help not to distort the tax base, but accordingly correctly calculate the tax. Nowadays, almost all accounting departments are automated, so problems with incorrect assignments are rare.

Why is it used in accounting practice?

Income code 2720 is used for the same purposes for which the system of codes for all taxes was invented:

unity and unification of information;
reducing accounting errors to a minimum;
improving the quality of tax control.

With the advent of modern means of communication, including TCS, communication between inspectors and company accountants has led to frequent questions from the Federal Tax Service regarding submitted reports and the need for quick responses from payers. If uniform codes are used throughout accounting, then the accountant will easily satisfy the request of the inspection inspector.

For reference! Gifts are paid out of the company's profits after paying all taxes and do not participate in the formation of the financial result.

The gift transferred to the person must be reported to the Federal Tax Service through certificates 2 personal income tax and calculation 6 personal income tax. The certificate is submitted once a year, calculations are submitted after each quarter and at the end of the year (instead of the fourth quarter, calculations for the year are submitted).

Important! If an employee asks for an income form, the employer is obliged to do this within 3 days from the date of the request.

As a rule, the form is generated automatically in 1C, but if an accountant does not have the opportunity to prepare a report on time on a computer, he must fill out the template manually.

An employee can also receive his certificate online – in the taxpayer’s Personal Account, since the Federal Tax Service stores all documents submitted by tax agents in digital form.

Main deduction codes

In addition to income codes, the Tax Code provides codes for tax deductions related to personal income tax. Let's look at the most common ones.

Standard deductions are indicated by:

114 - for the first child
115 - for the second child
116 - for the third and subsequent offspring
117 - for disabled children

311 - expenses for the acquisition or construction of residential real estate
312 - interest expenses on loans

320 — expenses for personal training
321 - expenses for education of children
324 - expenses for medical services

To provide any of the benefits, you need to collect a certain package of documentation and write a corresponding application in the employer’s accounting department. People exempt from paying personal income tax cannot take advantage of such benefits.

What does deduction code 501 mean?

The 501 deduction is applied when an employee receives a gift or prize. For such income, a certain tax calculation scheme is used. When the gift amount is less than 4,000 rubles, it is not included in the tax base. But if the value of the prize exceeds this limit, it is subject to tax. It will be calculated on income minus benefits.

The features of this benefit are as follows:

The amount of the deduction cannot be higher than 4,000 rubles.
If the value of the prize is more than four thousand rubles, the difference between the price and the deduction will be taxed at 13%.

Let's look at how this happens with an example.

Suppose a person received a gift worth 8,000 rubles. This amount will be indicated on the certificate; below, the deduction will be indicated with code 501 in the amount of 4,000 rubles. Thus, the tax will be calculated on the amount of 8000 - 4000 = 4000 rubles. And it will be 4000 * 13% = 520 rubles.

Only residents with official income are entitled to claim this benefit.

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Deduction code 501 indicates that the taxpayer received a gift from an organization or business owner with a value not exceeding the limit. In the article we will look at when such a deduction is included in the certificate, in which section it is reflected and what amount it is.

In the article:

What does deduction code 501 mean?
Who is eligible for deduction code 501?
Where in the 2-NDFL certificate the code with the 501 deduction is reflected.

What does deduction code 501 mean in the 2-NDFL certificate?

Order of the Federal Tax Service of Russia dated September 10, 2015 No. ММВ-7-11/ [email protected] (as amended by Order of the Federal Tax Service of Russia dated November 22, 2016 No. ММВ-7-11/ [email protected] ) contains a complete list of codes for deductions provided under Ch. 23 Tax Code of the Russian Federation.

In Appendix No. 2 of this regulatory act we will find a description of code 501. It looks like this:

deduction from the value of gifts received from organizations and individual entrepreneurs.

Let us turn to the wording of the Tax Code of the Russian Federation. Article 28 217 contains a list of income exempt from taxation. Such income includes gifts from an organization or individual entrepreneur, but with a total value of up to 4,000 rubles per tax period, i.e., a calendar year.

Despite the fact that the Tax Code speaks here not about deductions, but about non-taxable income, it is this amount of non-taxable income that code 501 implies. For this reason, deduction under code 501 always appears next to income under code 2720. The amount of the deduction cannot exceed the amount income under code 2720.

You can fill out deduction codes for free in 2-NDFL for free in the Bukhsoft program.

Legal issues

Good afternoon The apartment was purchased with a mortgage and in common joint ownership with my husband, under a shared construction agreement in 2021. The cost of the apartment is 1,424,150 rubles. The transfer and acceptance certificate was signed on December 29, 2021. We will write a statement on the distribution of income, is the date of the statement important for the tax authorities? The interest paid to the bank since 2021 and at the moment is 193226.71 tr. Tell me how to go...

But there are also more complex codes. For example, the code of an identity document in 2-NDFL. There are 14 such “documentary” codes in total. They can be found in the document codes directory (Appendix No. 1 to the Procedure for filling out the form). Code 21 means a passport of a citizen of the Russian Federation, code 03 means a birth certificate, code 07 means a military ID, etc.

What documents do I need to confirm my right to deduction code 501?

When transferring a gift from an organization or individual entrepreneur to an individual, the gift agreement can be concluded either in writing or orally. This follows from the provisions of Art. 574 of the Civil Code of the Russian Federation. A written form of a gift agreement is mandatory only in three cases:

promise of a gift of movable property in the future;
donation by a legal entity of movable property worth more than 3,000 rubles;
donation of real estate regardless of its value (due to mandatory state registration of such an agreement).

In addition, a mandatory primary accounting document is required to reflect the transaction in the accounting records of the tax agent. Such a document could be an order from the manager regarding the presentation of gifts. A certificate of issuance of gifts or other similar documents can also serve as confirmation of the issuance of gifts. The main requirement for such documents is that they can be used to identify the donee (that is, the taxpayer), and you can also determine the value of the gift itself.

Please note that if the recipient did not sign the statement of receipt of the gift or otherwise expressed his refusal to receive the gift, then the tax base with code 2720 (and therefore the deduction with code 501) does not arise.

The right to deduction under code 501 is inherent in the very wording of clause 28 of Art. 217 Tax Code of the Russian Federation. If an employee is given a gift, then the amount up to 4,000 rubles is not subject to personal income tax.

Example

Let's look at an example of how to reflect deduction code 501 in a certificate:

Let’s say that P.P. Semenov received a salary of 24,101.07 rubles in December 2021. and was given a New Year's gift, the cost of which was 6,000 rubles. Firstly, these types of income must be entered into the reporting form under different codes: 2000 and 2720, respectively.

Due to the fact that the size of the gift exceeds 4 thousand rubles, it must be included in the document, and in the “deduction code” field, enter the required benefit “501” indicating the limit established by law. Personal income tax will be calculated from the remaining amount - 2000 rubles.

When calculating the tax base, it is necessary to subtract the deductions provided for the year from the total amount of income, including under code 501.

Sample declaration to fill out:

In line 020 it is necessary to indicate not the entire cost of the gift, as in the certificate, but the amount not subject to taxation, that is, 4 tr. When filling out the form, it is recommended to use a certificate of income of individuals, which reflects all accruals and deductions of the employee.

The nuances of reflecting deductions with code 501 in the 2-NDFL certificate

The limit on the non-taxable amount of financial assistance is imposed on the taxpayer, that is, on an individual, for one calendar year. After the total value of gifts exceeds the amount of 4,000 rubles, all subsequent income is taxed. In this case, the amount of non-taxable income is calculated as follows:

in January, an employee was given a gift worth 2,000 rubles, the entire amount of the gift is not subject to taxation;
in August, an employee was given a gift worth 3,000 rubles - in the current calendar year, only 2,000 rubles of the deduction were spent, which means that a deduction in the amount of 2,000 rubles can be applied to the August gift, respectively, personal income tax is withheld only from 1,000 rubles.

The position of some officials (for example, letter from the Federal Tax Service for Moscow dated March 14, 2018 No. 20-14 / [email protected] ) indicates that if income is completely tax-free, then it may not be reflected in the 2-NDFL certificate (neither the income itself, nor the deduction). And if part of the income is subject to taxation, the certificate must reflect the entire amount of income and the amount of the deduction.

That is, in the case when a gift is given in the amount of 2,000 rubles, such a gift may not be shown in tax reporting forms at all. But if a gift was given to an employee in the amount of 7,000 rubles, the reporting form must reflect income with code 2720 in the amount of 7,000 rubles and a deduction with code 501 in the amount of 4,000 rubles.

This position applies not only to filling out the 2-NDFL certificate, but also to completing the 6-NDFL reporting form.

There is one more nuance regarding the deduction with code 501. This applies to cases when it is impossible to personalize the recipients of the gift, as well as to assess the economic benefit of the gift recipients. For example, this situation may arise when giving gifts in the form of gift certificates or tickets to entertainment events. Then, according to officials, there is no tax base. And since there is no tax base, then there is no deduction either. This position can be found in the letter of the Ministry of Finance of the Russian Federation dated 09/08/2015 No. 03-07-07/51585.

Deduction codes are indicated in the 2-NDFL certificate. Each deduction has its own code. For which deductions the 501 deduction code is used, read the article.

How

Certain taxes are deducted from each working individual, or rather from wages. There is an official document 2-NDFL, which records data on income and tax deductions that the employer transfers for the employee to the state.

What is 2-NDFL?

This is a specialized document. You can apply for it directly from your employer. The certificate must contain the details of the enterprise in a clearly defined form, and an original seal must be affixed.

To issue an official document, you need to contact the accounting department.

Tax legislation states that the period for issuing a certificate is no more than three days, and holidays and weekends are not included in the calculation.

Issuance times may be seriously delayed if the request for documentation was made orally. To protect your rights and interests, you need to submit a written application in free form to the accounting department. From the moment of its submission, a completed certificate must be provided within the established period.

What does the document indicate?

There is a special form and the data and details that must be included in the document are defined. Data is provided not only for the employee, but also for the employer:

Name of company. In this case, all registration codes in the tax register, as well as other details, are indicated;
Employee’s passport data (taken from the first two pages);
The amount of total income for a clearly defined period of time is indicated;
The sum of all deductions;
Data on standard, social and property deductions may be indicated, indicating their codes (if the employee is entitled to receive them).

Why might a 2-NDFL certificate be required?

Most often, such a document is required when applying for a loan from banking organizations. The certificate allows you to see that the person actually has official employment and is solvent.

Based on accurate data on income received, bank employees can make the right decision on the issue of providing credit funds.

In essence, the certificate is a reflection of the client’s level of solvency and allows you to determine what limit of loan funds can be provided.

2-NDFL may also be requested in the following cases:

When the process of registration is carried out, as well as receiving the due tax deductions;
When applying for various social benefits and benefits. For example, such a document may be required if a person expects a refund for a child’s paid education;
In certain lawsuits, controversial situations and proceedings, a certificate may often be required as a document determining the availability of a permanent and official place of work and the amount of income received;
When calculating a future old-age pension, providing such a certificate is necessary (on its basis the main elements of the calculation are made);
When registering guardianship or adoption, a mandatory condition is confirmation of the status of a working citizen;
It is recommended to issue a certificate upon dismissal, since in the future new employers often require the provision of data on wages and taxes;
When applying for a foreign visa, bank statements about the accrual of wages on the card are most often requested; a certificate of permanent employment may also be required. But, in some cases, the consulate may require the provision of 2-NDFL;
When calculating unemployment benefits, data on wages for the last six months is usually used (data from the last place of work is taken into account). Accordingly, in such situations, providing a document in 2-NDFL format is mandatory, otherwise the employment center may refuse to accrue a specialized benefit.

Certificate 2-NDFL on maternity leave or on sick leave

There are situations when a pregnant woman or an employee on maternity leave needs to apply for a special monetary benefit in social structures. This benefit is assigned in the form of compensation for child care.

Benefits are calculated based on accurate salary data. When a woman goes on maternity leave, payments in the amount of one hundred percent of the average earnings from her place of work are required.

The calculation is influenced solely by the amount of earnings; other factors, such as length of service, cannot affect the amount of the benefit. In order to correctly and competently determine the amount of cash benefits, it is necessary to be guided by salary data. By law, data from the last two years is taken into account.

The current employer must obtain a 2-NDFL certificate from the previous place of employment if the woman has been on the payroll for less than two years; this is the only way to make a correct and legal calculation.

In 2010, changes were introduced that determined that a certificate of this format is the main source for calculating payments for sick leave.

In the calculation process, the accountant must use data on the employee’s average salary for the last two years.

Certificate 2 Personal income tax is used in various cases, acts as a legally significant document, and is considered an official source of data on the income received by an individual.

Why might a certificate be required at a new workplace?

An accountant can calculate the amount of benefits for a new place of work only on the basis of the data from the 2-NDFL certificate from the previous job. Therefore, it would be rational for the employee to ask for this document before dismissal.

There are often situations when benefits are calculated according to general standards, taking into account the new salary, which provokes increased parameters.

All the nuances of deductions are defined in Article 218 of the tax legislation. It is established that receiving certain deductions is possible only if the total income for the year does not exceed the amount of 350 thousand rubles, and the structure of the calculations itself is also determined.

Changes in certificate 2-NDFL

In 2021, new changes were made that affected only certain sections of this document. So, in the second section you will need to indicate not only all the data about the individual, but also the TIN.

This field must be filled in for those employees who are not residents of the country, but are officially employed. A new list of taxpayer statuses has appeared in the section.

The following positions appeared:

Immigrants from foreign countries are voluntary and are compatriots;
Foreign employees who have refugee status;
Foreign persons who have received temporary asylum on the territory of the Russian Federation;
Employees who work on the basis of a patent.

The most common errors in the 2-NDFL certificate

There is a standard form with mandatory fields to fill out. A document may be declared invalid or erroneous in a number of cases.

If required fields were omitted, if errors or typos were made, strikethroughs were made. When such errors occur, it is best to fill out a new form.

You can use already developed standard templates, which will help eliminate common errors.

Often the reason for declaring a document invalid is the incorrect date indication. In accordance with the requirements, the date must be indicated exclusively in numbers. Writing the date in words is not acceptable and is a serious error.

A document can only be stamped in a clearly defined location. That is, it is placed at the bottom of the page in the left corner, there is an indication there - M.P.

It is imperative to ensure that the seal imprint is clear and bright, without any scuffs or washouts.

Accounting employees who fill out such documents must carefully check the data entered into the certificate. Any errors or inaccuracies in the numbers can become the basis for serious problems in the future.

The quality of the stamp is also checked.

The difference between form 2-NDFL and 3-NDFL

The taxpayer fills out form 3-NDFL independently and then submits it to the required tax authority. The essence of this document is to record the citizen’s additional income.

We are not talking about permanent employment. For example, a document is drawn up when selling real estate that has been owned for less than three years.

By law, the state has the right to withhold a certain tax from such a sale.

That is, if a person has some kind of additional income, he is required to fill out 3-NDFL, while the 2-NDFL form for permanent place of employment is also provided to the tax authority. Essentially, this document determines that an individual carries out the process of paying income tax.

The validity of the 2-NDFL certificate in accordance with the established norms of legislation (Article 23 of the Tax Code of the Russian Federation) does not have strict restrictions. But practice shows that organizations set their own time frame for the validity of such a document.

This is primarily due to the fact that enterprises have clearly defined validity periods for internal regulations documentation.

To confirm solvency, you need to provide a certificate that will comply with the following standards: all data must be current, the amount of income must be indicated for a clearly established period of time (most often for the last six months), the document must reflect not only income, but also deductions to the state .

Credit organizations have the right to establish their own specific rules and requirements regarding the validity of the certificate.

Most often, commercial banks only accept certificates issued within the last month.

Some commercial banks may also request the provision of 2-NDFL, which will be issued precisely according to the standards of the credit institution and based on the use of a bank form.

All income codes

Summarizing the above, below is a table with a breakdown of income codes that may appear on income certificates in 2019. It combines new and old codes. Use this table when generating 2-NDFL certificates.

Source: https://zen.yandex.ru/media/pro_bablo/kak-rasshifrovat-2ndfl-i-3ndfl-polnaia-tablica-kodov-5c3b22af075a8d00b09ada02

Deduction code in certificate 2-NDFL

Every year, companies report the income of their employees and the amount of taxes withheld from them. To do this, use a certificate in form 2-NDFL.

During the year, an employee can contact the accounting department to obtain a 2-NDFL certificate, for example, for a bank.

When drawing up a certificate in form 2-NDFL, use the Procedure, which was approved by order of the Federal Tax Service dated October 30, 2015 No. ММВ-7-11/485. Fill out the certificate information based on information from the personal income tax registers.

Deduction codes are indicated in the table of section 3 of form 2-NDFL. Each deduction has its own code.

Sample 3-NDFL declaration for 2021 to receive a deduction for treatment

To receive this money into a bank account, you need to fill out a tax return in Form 3-NDFL and attach a copy of the clinic’s license to it; a medical certificate indicating the type of treatment; financial document for payment of medical services; salary certificate form 2-NDFL for 2021; personal statement indicating bank account.

Sotnikova Marina Petrovna works as a teacher at a college and is officially registered. In the summer of 2021, she was treated at the clinic, paying a total of 140,000 rubles for medical services. In 2018, Sotnikova earned 360,000 rubles.

24 Dec 2021 marketur 258

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