What taxes do pensioners not pay: types of benefits and social assistance from the state

Contrary to popular belief, reaching retirement age is not grounds for stopping tax payments to the state. In Russia, older people are often forced to pay taxes on the same basis as young people. For this category of the population there is a fairly extensive list of benefits and exemptions from payments. In this article we will look in more detail at what taxes pensioners do not pay.

What taxes do pensioners not pay?

What tax benefits do pensioners have?

Pensioners are not automatically exempt from taxes, but all categories of citizens receiving a pension can count on tax benefits. These include:

• the right to exemption from property tax for one object;
• exemption from personal income tax (hereinafter referred to as personal income tax) on benefits;
• the right to receive a property tax deduction during the purchase of housing;
• benefits provided by regional and local authorities.

List of required documents

The list of required documents is standard.

Who is entitled to tax benefits?

Vulnerable segments of the population may qualify for social protection from the state in the form of benefits. Persons receiving a pension are classified as beneficiaries. It includes:

• citizens who have retired due to old age;
• civil servants and citizens entitled to receive early retirement benefits;
• disabled people;
• citizens who have lost their breadwinner.

Legal regulation

The procedure for obtaining tax benefits is regulated by Federal laws, the Tax Code of the Russian Federation (hereinafter referred to as the Tax Code of the Russian Federation) and a number of Decrees of the Government of the Russian Federation. The regional administration also has the right to make its own adjustments, reduce the tax base, conduct explanatory work among the population and notify about responsibility if a debt has arisen.

According to Article 395 of the Tax Code of the Russian Federation, small indigenous residents of certain areas have the right not to pay land tax.

Article 407 of the Tax Code of the Russian Federation specifies the categories of pensioners applying for tax benefits on property:

• heroes of the USSR and the Russian Federation, persons awarded the Order of Glory of three degrees;
• participants in the Civil War, the Great Patriotic War and other military operations, who served in military headquarters, units, institutions, were part of the active army, former partisans, combat veterans;
• civilian mercenaries of the Soviet Army and Navy, internal affairs bodies, state security, who were on the staff of military units, institutions, headquarters;
• citizens who were involved in eliminating the consequences at the Chernobyl nuclear power plant and other man-made disasters; persons who took part in eliminating (or helping to eliminate the consequences of) accidents at nuclear installations;
• disabled people of groups 1 and 2, disabled since childhood;
• retired military personnel with more than 20 years of service;
• family members of military personnel who have lost their breadwinner; relatives of military personnel and civil servants who died in the line of duty;
• persons who became ill with radiation sickness or received disabled status during tests, exercises, and other work related to nuclear and space technology.

Conditions for providing tax benefits for pensioners

To apply for tax benefits for pensioners, you should contact the tax authority at your place of registration. The process of obtaining benefits is of an application nature, but you need to remember the following nuances:

• For working pensioners, the same tax benefits are provided as for non-working pensioners.
• Pensioners who own a private business or are individual entrepreneurs pay the same taxes as other citizens.

A table of tax privileges in accordance with the categories of pensioners who are entitled to them will help you understand the issue:

Property tax for individuals

Coordination of the cost of housing with the cadastre entailed an increase in tax fees.

The procedure for providing benefits has not changed - pensioners are exempt from paying property tax, but since 2015, if a person owns several properties of the same type, real estate to be excluded from the tax base will have to be selected.

The rule is addressed to scammers trying to re-register property by transferring ownership to an elderly person in order to avoid a fiscal fee.

Objects of preferential taxation:

Some types of real estate owned by pensioners are not subject to taxation. Benefits do not apply to luxury real estate worth over 300 million rubles.

Objects of preferential taxation include:

• apartment or individual residential building;
• room;
• residential country house building up to 50 sq. m;
• garage;
• rooms for creative activities.

Transport tax

This fee is classified as regional. The Tax Code of the Russian Federation does not contain specific rules regulating the exemption of pensioners from transport tax, but some features of the relief can be highlighted.

The following are not subject to transport tax:

• water transport equipped with a motor of no more than 5 liters. With.;
• agricultural machinery - combine or tractor;
• cars and motorcycles with an engine capacity of no more than 100 hp. With. and vehicles owned by persons with disabilities.

Transport taxation of pensioners has regional characteristics, for example:

• In the Novosibirsk region, pensioners pay a 20% tax rate on vehicles equipped with an engine of no more than 150 hp. With.;
• In the Samara region, the tax rate for persons receiving a pension is 50% of the total;
• In Moscow, all benefits for paying transport taxes have been abolished.

Land tax

Land tax is a local tax and is set by local authorities. However, at the federal level, starting from 2021, tax incentives for pensioners have been introduced in relation to land tax, providing for a reduction in the amount of tax by the cadastral value of 6 acres of land owned by them.

This means that for plots of 600 sq.m. and you won’t have to pay less land tax.

Other tax benefits (for example, complete exemption of pensioners from paying taxes on land of any size) may be established by regulatory legal acts of the relevant municipalities. All information about their presence or absence can be provided to the pensioner at the local administration or tax office. To take advantage of the benefits provided for by acts of local authorities, the pensioner must submit an application and documents confirming his preferential status.

According to Article 395 of the Tax Code of the Russian Federation, indigenous peoples of the North, Siberia, and the Far East of the Russian Federation and their communities are exempt from paying land taxes.

Property deduction

In relation to property acquired by a pensioner at his own expense, the right to a property deduction is granted. It can be completed once in a lifetime, if close relatives did not take part in the transaction. The amount to be refunded is 13% of the funds spent on the purchase of property. Its cost should not exceed two million rubles.

In the case of shared ownership, the fee is charged on the part of the property that is owned. Property tax deductions apply to purchase and sale transactions. To reduce income tax or completely exempt it from it, the following conditions must be met:

• reduction of the tax base due to tax deductions that reduce the amount of the fee payable;
• compliance with the minimum terms of ownership of property.

Personal income tax is the main source of income for regional and local budgets. The legislation of the Russian Federation does not provide any concessions for its payment for any categories of persons. State pension provision is not included in the tax base, therefore personal income tax is not assessed on:

• all types of pension benefits, fixed payments, social benefits;
• amounts in total not exceeding 4,000 rubles per year, with which the enterprise covers the payment for sanatorium vouchers, treatment, medical care, the purchase of medicines, the provision of financial assistance or gifts to former employees after retirement or in connection with dismissal due to disability.

For working pensioners

All Russian citizens are required to pay personal income tax. The Tax Code provides for a number of incomes that are not subject to taxation. These include pension payments to which working pensioners are entitled:

• social supplement;
• insurance and funded parts of the pension;
• fixed additional payment, pension supplements associated with indexation;
• financial assistance or gift given by a former employer;
• medical care, payment for treatment, sanatorium vouchers by the organization in which the pensioner left his position due to old age or disability;
• monetary compensation for expenses on medicines for former employees.

Tax deduction for the purchase and sale of real estate

Money spent on the acquisition or construction of real estate can be returned partially or completely. Tax deductions for the purchase of housing are available to both working and non-working pensioners.

However, the conditions for obtaining it will differ:

• For working pensioners, the right to receive a property tax deduction is valid directly from the year in which the property was registered as ownership. If the amount of the fiscal fee is less than the deduction amount, the unspent portion is carried over to subsequent years until it is fully used.
• For non-working pensioners, the remaining tax deductions are transferred to previous tax periods, taking into account the last three years before the acquisition and registration of real estate.

The amount of personal income tax payable on the sale of real estate is calculated at 13% of its value.

When calculating personal income tax, not only the period of ownership of the property is taken into account, but also the year of registration of ownership by the owner:

• Until 01/01/2016 – the fee is charged on the cost specified in the purchase and sale agreement.
• After 01/01/2016, recalculation is carried out based on the higher value: contractual or cadastral.
• If a tax deduction is not possible, the amount of profit from the sale of real estate can be reduced. If there are documents confirming the amount of expenses that the seller incurred during the purchase, the fee will be calculated on the difference between the purchase price and the sale price.
• If the seller has acquired other real estate to replace the sold property within 1 year, the income from the sale of housing will be reduced by the amount of expenses for the new purchase, but not more than 2 million rubles.

Pensioners can save when paying personal income tax on income received from the sale of housing if they implement the benefits provided by law:

• Use a tax deduction of 1 million rubles if the minimum period of ownership of the property is met. For taxpayers who acquired and registered ownership of property: before 01/01/2016 – the minimum period of ownership of the property is 3 years; after 01/01/2016 – 5 years.
• Once per tax period (calendar year), regardless of the number of property objects sold, the seller can receive 1 deduction.

You can register and apply for a benefit:

• through the tax office, by personally contacting a consultant or inspector;
• by sending the relevant documents and/or copies thereof and an application by Russian Post to the address of the territorial office of the Federal Tax Service by registered mail;
• through the Federal Tax Service website using the electronic registration form;
• through your employer.

Documents required to apply for property tax benefits:

• passport of a citizen of the Russian Federation;
• pensioner's ID;
• taxpayer identification number;
• certificate of ownership of the property to which the tax deduction is applied.

New additional benefits under the new pension law and who will receive them

On October 3, 2021, Russian President Vladimir Putin signed a law raising the retirement age. Prior to this, the State Duma and the Federation Council adopted the document taking into account the presidential amendments. The adopted laws provide not only for raising the retirement age, but also for additional benefits for those who have very little time left before receiving an old-age pension.

A new term appears - “persons of pre-retirement age”.

Starting next year, they will include all those who reach retirement age “in the old way” - i.e. 60 year old men and 55 year old women.

According to the new rules, they will not yet be granted an old-age pension, but they will nevertheless be provided with a number of benefits:

Right to exemption from real estate tax

Starting next year, tax benefits for current pensioners will also be extended to people of pre-retirement age. In other words, upon reaching the age of 60 years (for men) and 55 years (for women), property owners will be exempt from:

A) From property tax for individuals - for one apartment (or room), one house (or part of a house), one garage (or parking space), one outbuilding (up to 50 square meters in area).

B) From land tax - on a plot of up to 6 acres.

In the current conditions, when there is a transition to calculating taxes based on the cadastral value of real estate (which inevitably entails an increase), the value of tax benefits increases every year.

Social tax deductions for pensioners who continue to work

Social tax deduction is guaranteed for working pensioners on a general basis, as for any other working citizen of the country. This means that the maximum amount of tax social deduction is limited to a limit of 50,000 rubles, and in total no more than 120,000 rubles.

Social tax deductions are due for the following types of payment:

1. for own education and education of children under 24 years of age;
2. under a non-state pension insurance agreement in the amount of the insurance amounts paid;
3. in the amount of additional insurance premiums for the funded part;
4. in the amount of contributions under a voluntary life insurance contract when concluding a contract for at least 5 years;
5. for the services of medical organizations (including for medicines purchased at one’s own expense)

Important! If the treatment is expensive and is included in the legislative register, then reimbursement of expenses occurs in full without taking into account the established limits.

Tax deduction for treatment and sanatorium rehabilitation is the most popular type. Conditions that must be met:

1. the payment was made with the pensioner’s own funds;
2. the medical organization has a license to operate and pays taxes;
3. medicines are included in the official register;
4. all expenses spent can be documented;
5. the type of medical service is included in the register.

Another type of popular deduction is the tuition deduction.

Conditions for receiving this type of deduction:

• the organization must have a license to conduct educational activities;
• there is an agreement for the provision of paid services;
• Tuition costs can be verified.

Among the types of training are:

• tuition at a university on a paid basis;
• obtaining a license at a driving school;
• training at paid trainings and seminars;
• studying of foreign language.

Important! The deduction can be issued not only for your own education, but also for parents and children.

Right to keep your job

Employers will be prohibited from dismissing workers or refusing to hire them on the grounds that they have reached retirement age - under pain of criminal liability.

Corresponding changes are being made to the Criminal Code: the perpetrator will face a fine of up to 200 thousand rubles or compulsory labor for up to 360 hours (the bill has already been adopted in the third reading by the State Duma).

In addition, the period for payment of unemployment benefits for persons of pre-retirement age is extended depending on the length of service:

• when working for 20 and 25 years (women and men, respectively), the benefit is paid for 12 months,
• and for each year of service beyond the established duration, the period for payment of benefits is extended by another 2 weeks (but not more than up to 24 months in a total of three years).

FAQ

Question No. 1. Are there any special features when filling out the 3-NDFL declaration for working pensioners?

Answer. No, there are no special features. Filled out in the general order.

Question No. 2. What other types of activities can pensioners engage in, besides employment, to receive tax deductions?

Answer. Other activities include:

• IP;
• private practices;
• holders of royalties.

Right to receive alimony

Family law provides for the right of disabled parents to receive child support from their adult children. In this case, the parents’ inability to work is confirmed either by disability or by reaching retirement age.

In connection with the upcoming increase in the retirement age, it is planned to leave at the same level the age when a parent has the right to demand alimony for his maintenance from a child - 55 and 60 years old (for women and men, respectively).

A project to introduce such changes to the Family Code has already been submitted to the State Duma for consideration. If approved, persons of pre-retirement age will be able to receive alimony, even if they have not yet been assigned an old-age pension.

Let's sum it up

As you can see, there are quite a few nuances regarding benefits for pensioners. The unpleasant aspects of the legislation are the following:

• mandatory “declarative” nature of benefits;
• the degree of difficulty in collecting the necessary papers and finding out data for people of retirement age.

It is really unpleasant that if a pensioner does not have time to submit an application on time, then in many cases he will be forced to pay some taxes, and, without even knowing, probably, that he can be exempt from them. In addition, many pensioners are in a state where it is difficult to figure it out on their own and go through all the necessary authorities due to their physical condition.

To help them figure it out without leaving home, the state provides the opportunity for consultation. Citizens of the country who have reached retirement age can find out information on all questions of interest about taxation by calling the Pension Fund of the Russian Federation. His hotline number is: 8-800-775-5445.

In addition, the Russian tax service is obliged to answer all existing questions. Here is her hotline number 8-800-222-22-22. Calls to these numbers are free, so pensioners do not have to worry about receiving hefty bills for telephone calls.

The right to an obligatory share in the inheritance

Today, people of retirement age can receive an inheritance even if they were not named in the will - provided that they are close relatives of the testator or simply lived with him and were dependent on him.

A bill has now been submitted to parliament that allows citizens of pre-retirement age to receive a mandatory share in the inheritance - i.e. The age for mandatory heirs will not change, despite the increase in the retirement age.

Of course, the most valuable benefit in the light of pension reform would be the lifting of the moratorium on indexation of pensions for working pensioners. But, unfortunately, such a bill has not yet been submitted to the Duma.

What else do you need to know about the payment system that will provide services?

On the official website of the MIR payment system there is a special section “Participants”. Here everyone can get acquainted with the list and find out which banks are already issuing these cards. In this section, the visitor will be able to clearly see in which places it is accepted and read about what regular partners say about the payment system. The card itself has mandatory elements that allow it to be distinguished from a fake. The 4 main factors were mentioned above. But you should also pay attention to the fact that in addition to the company logo, it should contain the name of the bank that issued the card. It can be of several types. Each pensioner chooses for himself what he wants to open. This will be indicated by a special inscription on the front side. Each card has its own special number, which begins with the 6 digits of the bank identification number. Mandatory rule: owner's name and expiration date. On the back there will be a pattern, a magnetic stripe, a place for a signature, an additional verification code and contact information for the person who issued the card.

Transition rules

Pensioners can receive the new land tax deduction under consideration starting from the 2021 period. At this transitional stage, a special rule applies regarding the timing and form of notification for 2017: you can notify the Federal Tax Service about the selected land plot for deduction in free form until July 1, 2021. After this date you cannot change your choice.

Here is an example of such a notification:

If a pensioner or other benefit recipient does not submit a notification about the selection of a land plot, the consequences are similar: the deduction will be calculated for the object with the maximum tax amount.

The Federal Tax Service, as part of the interdepartmental exchange of information with Rosreestr and other bodies, has all the information about the land plots owned by the pensioner. Therefore, it is hardly possible for a situation where the tax office does not have information about the second plot.

Example

Shirokova is a pensioner and owns 2 land plots with an area of ​​8 and 10 acres. For 2021, she has the right to claim a deduction for one of them.

Since a plot of 8 acres is located near the city and has a higher cadastral value, Shirokova decided to notify the tax office about it that she wanted to apply a deduction.

As a result, the land tax for 2021 will be calculated for her:

• for a plot of 8 acres - the same as for 2 acres;
• for a plot of 10 acres - for all 10 acres.

In our opinion, it is not entirely clear why the ability to submit a notification about the selection of a land plot for which the beneficiary wishes to use a tax deduction was introduced at all, if the inspectorate will still apply it during the calculation to the object with the highest tax amount.

Also see "Land tax in 2021".

Read also

13.12.2017

What other income besides pension payments is not subject to taxation?

We have already mentioned in this article that personal income tax is not deducted from funds received by a pensioner. So, it turns out that this tax benefit for pensioners in 2021 is not the only one. Persons on well-deserved rest are exempt from this tax in the following cases:

• when the enterprise where the pensioner worked provided medical and sanatorium vouchers for the former employee’s health improvement in resort facilities located in the country;
• when an employer pays for medical care or treatment of its retired employee;
• when a retired person receives cash payments from an enterprise or third-party organizations, if their total annual amount does not exceed 4,000 rubles.