Filing PIT for 2022 is not such a simple matter, as a result of changes related to the New Deal tax reform. Taxation methods and rules for determining advance payments have changed, but what about the existing youth tax credit? Does zero PIT still apply to those just entering the workforce?"
What is the youth relief and who is eligible for it?
From August 1, 2019, individuals who&oac;re under the age of 26 were given the opportunity to exempt their salaries from taxation. The year 2022 was marked by many changes in taxes and more, but nevertheless, in tax returns the zero PIT still applies, which means that young employees receive a higher net salary. This is because the employer does not have to withhold advance income tax from their salaries. The young tax credit is available to employees whoóre earning income both in Poland and abroad. Are there any limits associated with this relief?
Limit on relief for the young
In terms of limitsóon the relief for the young róalso the regulations have not changed. The income thatóre covered by zero PIT can reach a maximum of PLN 85,528. The relief for the young applies to incomeów from employment contracts and contracts of mandate, and from 2021 rów also from paid internships and apprenticeships for pupils, students and graduates. Higher income means that the excess earned (above the amount of PLN 85,528) will be taxed according to the tax scale. The youth tax credit is available regardless of the number of contractsów, while it does not apply to, among others, self-employed persons, those employed on a contract for specific work or those working on a B2B basis. How to take advantage of the relief for the young?
How to take advantage of zero tax until age 26?
Until the end of 2019, it was necessary for an employee to submit a statement of intent to take advantage of the youth tax credit. In 2023, as in the previous year, an employee before the age of 26 does not have to provide any statement of intent to use this relief to the employer. Zero PIT is granted to the young person automatically, starting from the first payment. In the reverse situation only, that is, when the employee does not want to take advantage of the young person's relief for some reason, he or she must submit a statement to that effect.
Do all individuals under the age of 26 have to file PIT-37?
If the income of a person under the age of 26 in 2022 has not exceeded the aforementioned limit, he or she does not have to file an annual PIT return of 2023. It is only after exceeding the limit of 85,528 per year that the obligation to account for and show the amount of incomeóra that is in excess of this limit arises. Only the amount thatóra exceeds this limit is taxed in this case, not the total incomeów received during the accounting year. Importantly, individuals whoóre under the age of 26 and who simultaneously receive income from a business, contract for work or copyright, or rent are required to file a PIT return, even if at the same time they are taking advantage of the youth relief under the employment relationship.
The taxpayer must file a PIT return.
Where and by when do you have to file PIT?
In 2023, taxpayers have until May 2, 2023 to settle their PIT returns. The PIT tax return must be filed with the tax office corresponding to the place of residence. This refers to the place of residence proper as of the date of filing the return, and not, as was previously the case, as of the last day of the previous year, i.e. the period to be settled. Do not confuse the youth relief with the obligation to pay Social Security contributions, from which the young employee is no longer exempt.