In 2021 the income campaign has already started, and the tax deadline is June 30 for submitting the declaration. There are still many questions around this topic, especially when it comes to pensions. This article unpacks the main issues retirees face and explains what needs to be known about filing obligations and the affidavit process.
The law sets a minimum income threshold that obliges individuals to file an income tax return. The threshold is 22,000 euros per year for earnings from a single payer. This limit also applies to passive income streams such as pensions, passive assets from government programs, Social Security benefits, and the public benefits tied to disability, retirement, accident, illness, widowhood, or similar scenarios.
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Many retirees wonder whether they must file an income statement. Although it might seem that retirees do not have work income, the answer is that pension payments are generally taxable. This means most retirees must file a declaration, just like working individuals. Pensions do have special considerations that retirees should be aware of in the filing process.
If living in the Community of Valencia, these expenses can be deducted from the income tax return.
For example, a pension received from abroad can count as a second payer. If the income from this second payer exceeds 1,500 euros, a declaration must be submitted.
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Additionally, if a beneficiary receives a benefit through a retirement plan and withdraws all or part of it, the amount will be treated as income from the business. Therefore, when the second payer exceeds 1,500 euros, it becomes mandatory to submit a declaration with a minimum of 14,000 euros.
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If retirees realize capital gains from contests, online games, poker, or the repayment of investment funds, these amounts must be declared to the Treasury.
Deductions in the declaration of income for rent in the Community of Valencia
There are deductions available for certain rent-related expenses within the Valencia community, which can reduce the overall tax burden for eligible retirees.
Which retirees don’t have to make an income statement
Some pension incomes are exempt from filing, including:
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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 for severe disability.
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Death benefits.
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Pensions granted in favor of relatives due to the absolute incapacity of the owner.
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Benefits derived from acts of terrorism.
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Dependent child benefits.
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Pensions for those injured or maimed in historic conflicts.
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Spouse’s compensatory pensions.