Many people live this situation when they make the income. This people have sons or daughters who have to make the income too or make voluntarily and their parents ask if they can also deduce them in their income tax.
In this article, we will resolve theses questions in a very simple way: we will see when you can deduct them and when this is not possible.
Sons and daughters in the income statement
As collects the Tax Agency, it is only possible deduct the descendants in the income tax when the following requirements are met:
- Descendants under 25 years when the income tax is accrued. If the descendant has a degree of disability equal or greater than 33%, the age will not be relevant, but the others requirements have to be meet.
- Descendant lives with the taxpayer. If this descendant is internal in a specialized center, this situation is equivalent to living with parents.
- Descendant doesn’t obtain in the exercise incomes higher than 8.000 euros annually.
- Descendant who doesn’t submit income statement with incomes higher than 8.000 euros.
In relation with these last two points in which we will focus in this article, the following situations are possible:
- Descendant under 18 years with incomes under 1.800 euros or without incomes. This situation gives to the taxpayer the possibility of deducting it. It is possible submit a joint income with Family Unit, if all the members choose second option.
- Descendants under 18 years with incomes higher than 1.800 euros but lower than 8.000 euros annually. This situation gives to the taxpayer the possibility of deducting it if the descendant doesn’t submit an individual income statement.
- Descendant under 18 years with incomes higher than 8.000 euros annually. This situation doesn’t allow the taxpayer the deduction.
- Descendant over 18 years but less than 25 years without incomes or with incomes lower than 1.800 euros. This situation gives to the taxpayer the possibility of deducting it.
- Descendant over 18 years but less than 25 years with incomes higher than 1.800 euros but lower than 8.000 euros annually. If this descendant doesn’t submit an individual income statement, this situation gives to the taxpayer the possibility of deducting it. In the opposite situation, parents lose the possibility of deducting it.
- Descendant over 18 years but less than 25 year s with incomes higher than 8.000 euros annually. This situation doesn’t give to the taxpayer the possibility of deducting it.
We recommend you check out this article about when is compulsory submitting the income statement that we published last year, which remains in force in 2017. It will be useful for you and your descendants.
Parents in the income statement
When parents are living with their sons is very similar to descendants’ case. The requirements are:
- The taxpayer has to live at least half year with his father or mother.
- The ascendant has to be older than 65 years. If the ascendant has disability equal or greater than 33%, the age is no relevant.
- Not obtaining incomes higher than 8.000 Euros per year.
- Not submitting an income tax statement with incomes higher than 1.800 Euros.
If you have questions about which are the best options in your case, please contact with GM Tax. For example, if you have a son or daughter with less than 18 years with incomes higher than 1.800 Euros but lower than 8.000 Euros per year, we will study if the tax relief will be more beneficial in the case when he make an individual income tax statement or if the parents include in their statement.
The concept of annual income is constituted by the algebraic sum of the net income (from work, movable and real estate capital, and economic activities), of imputations of income and of capital gains and losses computed during the year, without applying the rules of integration and compensation. However, the income must be computed at its net amount, that is, after deducting the expenses but without applying the corresponding reductions, except in the case of earned income, in which the reduction provided for in article 18 of the Personal Income Tax Law may be taken into account when applied prior to the deduction of expenses.
