Main types of tax deductions for personal income tax in 2021

A tax deduction is an amount that reduces the amount of income on which tax is paid. Most often, company accountants and employees themselves have to deal with non-standard deductions for children. Let's consider how the deduction is granted and what the reasons for refusal may be.

Only an employee who is a tax resident of the Russian Federation for income subject to personal income tax at a rate of 13 percent can apply for a tax deduction. Thus, deductions are not provided for income in the form of material benefits, since a tax rate of 35 percent is applied. No deduction is provided for dividends. Despite the general tax rate, this is directly prohibited by paragraph 2 of Article 210 of the Tax Code of the Russian Federation. In the absence of taxable income, tax deductions cannot be obtained. This applies to women on maternity leave and entrepreneurs using special regimes (letter of the Ministry of Finance dated July 6, 2011 No. 03-04-05/3-489).

In accordance with subparagraph 4 of paragraph 1 of Article 218 of the Tax Code of the Russian Federation, standard deductions for children are provided to individuals who support children and are applied regardless of the provision of a standard deduction for the taxpayer. This deduction is provided monthly for each child to each of the parents, including the adoptive, guardian, trustee, adoptive parent, as well as the spouse of the parent, including the adopted one, until the month in which the employee’s total income exceeded 350,000 rubles. Once the employee reaches the income limit, he is no longer entitled to the standard deduction for children. Please note: both parents can receive the deduction at the same time (letters from the Federal Tax Service dated April 6, 2021 No. BS-2-11 / [email protected] , Ministry of Finance of Russia dated April 12, 2012 No. 03-04-06/8-109).

Deduction for children

The 2021 Child Tax Credit is available to one or both parents when they have a dependent child(ren).

For whom you can get:

• for a child under 18 years of age who is not a student;
• for a child studying full-time upon reaching the age of 24 years.

Note : the benefit is provided to both a native child and an adopted child taken under guardianship or guardianship.

Who pays

Taxes in the Russian Federation are paid by all citizens who receive profit. Regardless of whether they are residents of Russia or not.

Important! A resident of the Russian Federation is a citizen who has been on the territory of the country for 183 days or more and has Russian citizenship. A resident can also be a legal entity registered in Russia and acting (considered subordinate) in accordance with local legislation.

According to Art. 17 of the Tax Code of the Russian Federation, tax deductions are not always applied, but only in specific situations.

Benefit amount

The amount of the deduction depends on the number of children, their age, the type of arrangement in the family and the presence (absence) of disability in the child (children). In 2021, parents are entitled to receive a standard deduction in the following amounts:

• 1,400 rub. for the first and second child (if the child is not disabled);
• 3,000 rub. for the third and subsequent child;
• 6,000 rub. for a disabled child under guardianship and trusteeship;
• 12,000 rub. for a native or adopted disabled child.

Note : the guardian in whose care there is a disabled child will receive half as much as the parent and adoptive parent of such a child.

Social benefits for personal income tax

In addition to the standard benefit, there is also a social benefit. Citizens can also use it once a year. The following persons can receive it:

• Afghans.
• Single father or mother.
• Parents who have a disabled child.

About 2,000 rubles is the size of the reduction in the income tax base for parents. But for participants in the war in Afghanistan it is 500 rubles. The benefit also applies to treatment of parents and children, sometimes in foreign clinics. Only here documents are required that can confirm expenses: receipts, checks, contracts with a medical institution. Benefits to parents for children with disabilities of the first group or from childhood are given in the form that the tax base is reduced by the amount of income that cannot exceed three times the minimum salary.

Features of deduction for children

1. Receipt of this type of deduction is not tied to the implementation of any costs.

The property deduction is tied directly to the acquisition of property, the social one, for treatment, is tied to the costs of purchasing medicines, medical services (for example, prosthetics, dental implants, medical examination when diagnosing a disease, etc.).

1. Receiving a standard deduction does not deprive a citizen of the right to claim other types of deductions.

At the same time, a citizen can declare:

• property deduction if you purchased real estate: a house, an apartment (if you purchased a car or a garage, you cannot claim a deduction for it);
• property deduction if the sale of property took place, the period of ownership of which, exempting from payment of tax, has not expired;
• social for treatment, if a medicinal product was purchased or a medical service was provided included in the list approved by the Government Decree;
• social benefits for studies, if expenses were incurred for paid education at a university, driving school and other clubs and sections with full-time education.

1. The mother or father can receive the deduction both at the same time, or one of them in double the amount if the second parent waives his right to this benefit.

A double deduction cannot be obtained if the second parent refusing the deduction does not work and, accordingly, is not entitled to this benefit. Also, it will not be possible to claim a double deduction on grounds such as the other parent’s failure to pay child support or being divorced. At the same time, a single mother has the right to a double deduction if there is a dash in the father’s column or if he died.

1. The distribution of the deduction amount will depend on the age of the children.

1. The benefit is provided upon reaching an income of 350,000 rubles.

1. When calculating the benefit, the age of all children is taken into account.

Changes for social deductions

Such deductions are aimed at meeting the social needs of existing employees: paying for their training or necessary treatment, as well as charitable expenses are also included in this list.

Starting this year, every employee of an enterprise has the right to count on receiving payments for various social deductions, which are spent on treatment or training through their official employer. To take full advantage of this unique right, the employee must obtain a confirmation notice from the local tax office, which must then be presented to the employer.

To do this, you must perform the following steps:

• Provide documentation confirming expenses to the local tax office, as well as write a corresponding application;
• Take the approved notice and present it to the employer. The period for producing this important document is 30 calendar days.

This is perhaps the most basic thing that is required to receive a legal social deduction. The employee has every right to accumulate legal deductions, each time collecting confirmation notices from the inspectorate. You can receive deductions in a single payment or separately for each notification submitted.

Deductions are paid at the time requests are submitted to the inspection, so all documentation must be submitted in a timely manner.

If the amount of income of a particular employee is lower than the amount of these deductions, then the mandatory tax is returned to the inspectorate.

Calculation example

Lebedev A.V. - Single father with many children. He has 4 dependent children:

• 1 child – 25 years old;
• 2nd child - 22 years old, disabled, studying full-time at a university;
• 3rd child - 17 years old;
• 4th child – 5 years old.

The total amount of deduction that Lebedev can claim will be 18,000 rubles.

• 12,000 rub. – for a second disabled child;
• 3,000 rubles each. for the third and fourth child.

As the only parent, Lebedev has the right to a double deduction. The total amount of the benefit will be 36,000 rubles.

Lebedev's salary is 45,000 rubles. per month, of which personal income tax transferred to the budget is 5,850 rubles.

Without taking into account benefits, Lebedev receives a monthly salary in the amount of 39,150 rubles. (45,000 x 13%).

After applying the deduction, the tax will be deducted not from the entire income, but from the part reduced by the deduction, namely from 9,000 rubles. (45,000 – 36,000).

Taking into account the deduction, he will receive 43,830 rubles. (45,000 – (9,000 x 13%).

In total, the monthly benefit amount will be 4,680 rubles. (43,830 – 39,150).

He will apply this benefit until July, since in July his income will exceed the limit of 350,000 rubles.

Conditions for applying the standard deduction

The employer, acting as a tax agent, is responsible for calculating personal income tax, withholding it, transferring it to the budget, and providing benefits. The employer provides the employee with the opportunity to reduce the base when applying in writing. Application mechanism:

• The basis for receiving a preference is an application submitted to the director or chief accountant. The document is submitted once and is valid for other tax periods.
• The application can be submitted in any form, taking into account the rules of business turnover. The text indicates the details of the recipient, applicant, request, basis and list of attachments. A handwritten or typewritten application form with the original signature of the person is required.
• Documents confirming eligibility are attached to the application. A copy of the certificate or certificate is submitted to the accounting department, depending on the basis for the application.
• The benefit applies to remuneration subject to personal income tax. Payments in the form of benefits, compensation, travel allowances or daily allowances are not included in taxable income.

Persons receiving remuneration from another employer as external part-time workers have the opportunity to choose an enterprise to use the preference. There is no need to confirm that you have not received preferential treatment at another place of employment. Employees who claim benefits at multiple jobs are responsible for the overpayment. After employers submit reports, the individual’s debt will be identified.

Most workers submit an application with documents when applying for a primary position. In case of dismissal and hiring in the same month, the employer must request a certificate of income. In the absence of a certificate, a tax benefit, in order to avoid overpayment, will be provided starting next month. In other cases, a certificate is not required due to the absence of a link between the monthly benefit and the income limit.

Important! The deduction for the employee himself is provided monthly, without taking into account the maximum amount of income received.

Deduction for certain categories of citizens

The persons named in clause 2 of Art. also have the right to a standard deduction. 218 Tax Code of the Russian Federation

Table of the amounts of standard deductions for beneficiaries specified in clauses 1-2 of Art. 218 Tax Code of the Russian Federation

Note : a pensioner himself does not have the right to receive this benefit if he does not have the grounds listed in Art.
218 Tax Code of the Russian Federation. If, for example, a pensioner is a Chernobyl survivor, then, in this case, he has the right to count on a benefit in the amount of 3,000 rubles.

Deadlines

According to Art. 88 of the Tax Code of the Russian Federation, after filing a declaration and application, tax specialists conduct a desk audit within 3 months.

After the verification is completed, the citizen will be sent a letter with consent to provide a deduction or refusal. This document may arrive late, as practice shows.

According to Art. 78 of the Tax Code of the Russian Federation, if a citizen has paid excess tax, after receiving confirmation of the deduction, this money must be returned to him within a month.

As for income tax refunds, it takes from 4 to 12 months. According to Art. 78 of the Tax Code of the Russian Federation, if the deduction was made late, the tax authority must pay interest to the citizen, but after he proves that there was a delay.

Ways to claim a deduction for children

Standard tax deductions in 2021 can be obtained in two ways:

• through the tax authority;
• through the employer.

The procedure for receiving a standard deduction at your place of work consists of several stages:

• drawing up an application addressed to the employer to receive a standard deduction;
• preparation and delivery to the employer of documents confirming the right to this benefit;
• The employer will begin transferring income reduced by the deduction amount from the month in which it received the application and documents from the employee.

If an employee was unable to receive a deduction at his place of work, he has the right to declare it at the end of the year at the tax office.

Concept

The following citizens can receive the benefit:

• having children, minors;
• engaged in charitable activities;
• paying pension and insurance contributions;
• acquiring movable or immovable property;
• and so on.

A deduction is an amount by which the total amount subject to a particular tax can be reduced.

Refund through the Federal Tax Service

To receive benefits through the tax authority you must:

• prepare a declaration in form 3-NFDL for tax deduction 2017;

You can ask the tax authority for a sample of filling out the reports or download it on the Internet.

For accountants: please note that in 2021 there was a change in the deduction codes reflected in the 2-NDFL certificate.

The refund will be made to the employee after 4 months, allotted for a desk audit and transfer of funds by the federal treasury.

Income that is exempt from taxation

In the Russian Tax Code you can see the names of those incomes that are exempt from taxation. This list, although extensive, is closed. As an example, the following income should be cited:

• workers compensation in connection with the use of a personal car for business purposes with the consent of the employer;
• state benefits, with the exception of benefits that are issued for temporary disability and for caring for a sick child;
• pensions, as well as payments of pension savings in any form;
• remuneration to donors for the blood they donated, for mother's milk and other assistance;
• alimony;
• financial assistance provided by employers to their employees during the first year after the birth or adoption of a child. The amount of the benefit should not exceed 50 thousand rubles for each child;
• maternal capital.

Documents required to receive benefits

1. Declaration 3-NDFL (when applying for a deduction through the Federal Tax Service).
2. Certificate 2-NDFL (when applying for a deduction through the Federal Tax Service).
3. Copies of documents justifying the right to a deduction (child’s birth certificate, certificate of disability, certificate of completion of full-time education).
4. Marriage certificate (if the benefit is claimed by one of the spouses).
5. Documents confirming the absence of the second parent (if the deduction is claimed in double amount).
6. Application addressed to the employer for a deduction.
7. Application for personal income tax refund (if applied through the Federal Tax Service).

What should an employee know?

• The child deduction is due from the month when the child was born. But when a child reaches the age of eighteen, the deduction is due until the end of the year! Even if a child reaches adulthood in January, his parents will receive tax benefits until the end of the year!
• With children who have already reached adulthood but continue to study full-time, the situation is a little different. Deductions for them are given until the end of training or the child reaches 24 years of age. An important point: the employer stops providing the deduction in the month following the one in which the child completed his studies (for example, the child completed his studies in June, therefore, the deduction is not provided from July!). It is also worth noting that if the employee did not notify the employer in time that the child had completed his studies or was expelled, but then this fact becomes clear, the employer can deduct from the employee the amount that was paid without proper justification.
• If a person does not start work on January 1, he must provide a personal income tax certificate 2 from his former job, or it must appear from his work record that he did not work in any organization this year. Otherwise, he cannot expect to receive deductions this year.
• Anyone working at several enterprises at the same time receives deductions for one of the jobs. The employee has the right to decide for himself which organization to receive tax benefits from!

It should also be noted that the deductions are independent of each other, that is, if a person himself is disabled and has children, then he receives benefits for both children and himself!

So, filing a tax deduction is quite simple. This will take very little time, at least for the employee himself. But at the same time, the savings, as follows from the example given, will be quite significant.

Mandatory child deductions in 2021

Mandatory deductions for child support are a standard form of benefits; all spouses with children, including official guardians and trustees, can count on it. This type of tax break is provided to all children under 18 years of age, as well as students under 24 years of age studying full-time.

The amount of child benefits for the first and second baby is 1,400 rubles. For the third child, parents have the right to receive compensation in the amount of 3,000 rubles. The order in which babies are born is calculated according to their strict chronological sequence.

According to current legislation, there is a certain limit at which mandatory payments stop. This year this amount has been increased to 35,000 rubles, although last year this figure was within 28,000 rubles. In order to receive a mandatory tax deduction, you must present to the accounting department of the company where the parent officially works, a copy of the baby’s birth certificate.

If the parents, for some objective reason, are divorced and do not live together, then the second parent has the right to count on this deduction if he takes part in providing for the child. All this can be confirmed by alimony, which is spent monthly on the needs of the child.

Mothers and fathers raising children alone have every right to receive a double mandatory tax deduction. This is allowed if the second parent has not recognized the fact of paternity, is for some reason deprived of parental rights, or has died.