Retirees and the income tax filing question: what they need to know
The 2021 income campaign has already begun and the tax deadline remains until June 30. Many retirees still have questions about whether they must file an income tax return. This article explains the rules for retirees and outlines the affidavit process in simple terms.
By law, there is a personal income tax threshold that determines the obligation to file. The minimum level for business income from a payer is set at 22,000 euros per year. The same rule applies to passive income. These include pensions, passive earnings from government plans, Social Security benefits, and public disability, retirement, accident, sickness, widowhood, or similar draws.
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At that time, the question arises: do retirees have to file an income statement? Although many assume otherwise, retirees can be mistaken because pensions are subject to income tax. Therefore, most retirees, like any other worker, must file the declaration, though pensions carry special considerations that require attention.
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For example, a pension received from abroad counts as a second payer, so if the income exceeds 1,500 euros, a tax return must be filed.
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Additionally, if a beneficiary receives a benefit from a retirement plan and withdraws all or part of it, this may be treated as business income. If the amount from the second payer exceeds 1,500 euros, the declaration of a minimum 14,000 euros becomes mandatory.
Do Bizum payments need to be declared to the Treasury?
When retirement yields arise from capital gains tied to contests, online games, poker, or the repayment of investment funds, the statement must be submitted to the Treasury.
Deductions in the declaration of income for rent in the Community of Valencia
Specific deductions can apply for rent-related expenses in Valencia, reducing the overall tax burden for eligible retirees.
Which retirees do not have to file an income statement
Several streams of pension income are exempt from the filing requirement:
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Orphan’s pension.
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Alimony allowances received from parents by court order.
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Pensions for absolute permanent disability and severe disability.
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Death benefits.
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Pensions awarded to relatives due to absolute incapacity of the holder.
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Benefits related to acts of terrorism.
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Dependent child benefits.
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Pensions for those injured or maimed in the Civil War.
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Spouse’s compensatory pensions.