Standard tax credit for children 114 and 115 in 2020

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Taxes. Deduction codes

Taxes are what the financial viability of the state rests on. The richer the country, the higher the salaries of its citizens, and, consequently, taxes - the basis of prosperous and non-prosperous countries. If the state advocates that people pay taxes, the population would be happy to refuse them. But such is the system, its tax component is one of the pillars that supports our well-being.

In tax law there is such a thing as a deduction code. It is always associated with personal income tax. The state sets the amount of this tax. It is equal to 13%. Knowing this, every citizen of the Russian Federation can make independent calculations and get a figure that will be deducted from their salary as income tax. However, deduction codes change everything.

The essence of deductions

A tax deduction is a legally established amount by which the tax paid to the state by individuals can be reduced. That is, of the 13% that goes from your income to the budget, part of the funds will not be withheld or it will be returned if the tax has already been paid.

In the Tax legislation of the Russian Federation there are different types of deductions - standard, property, investment and social. Deduction codes 311 and 312 refer to property deductions.

To let your employer know that you are claiming a tax deduction, contact the Internal Revenue Service to confirm your eligibility. In response to the request, the tax office will issue a notice that must be provided to the employer. Further control over the correct filling of the fields of income declarations is carried out by the company's accounting department.

If your tax return is prepared by your employer, but you have doubts about anything, you can ask the accounting department for a copy of the 2-NDFL certificate. And see if all deductions are reflected correctly. If you're filing your own income tax return, it's even more important to know how to fill out the different fields on the form so you don't overpay the government.

The amount of the deduction and the amount of money returned by the state are not the same thing. The deduction amount is the amount of money by which income is allowed to be reduced when purchasing property. And the returned tax is only 13% of the deduction. In this case, one employee will be able to receive 13% of the maximum amount of 2 million rubles . But you won’t get all the 2 million rubles you spent. from the budget, but only 260 thousand rubles. And even if 3 or 5 million rubles are spent, more than 260 thousand rubles, you still will not be compensated.

How to return up to 1,300,000 rubles. →

However, if the purchased housing cost 1.5 million rubles, then you can purchase a second one or a plot of land for an amount exceeding 0.5 million rubles. and collect the remainder of the deduction. But this applies only to those who did not exercise the right to deduct earlier, before 2014.

It is important to know that the deduction is given only once; it is impossible to use the benefit again. The declaration cannot be submitted in the year in which the property was purchased, but only the next year or even later.

Tax deductions and reporting

All deductions from the tax base must be regularly reflected in the enterprise’s reporting. They are included in the 2-NDFL certificate, which is necessary for the taxpayer to provide a report on his income and deductions made from it. The certificate is also presented when entering a new workplace, to banks and other authorities. Many issues cannot be resolved without providing this document.

In 2020, many codes underwent changes, which happened due to adjustments to the state’s legislative tax base. However, codes 104 and 105, like most codes from the standard category, were not affected by the changes.

If for any reason the tax has already been paid by the taxpayer without deducting the code, the due amount is returned to him, according to the document provided by the taxpayer.

There are deadlines for return: after submitting the application, the procedure must be carried out within three months, and no later. If the refund is carried out by the tax office, three months are allotted to verify all documents, plus another month to transfer the amount to the taxpayer’s account.

Even deduction codes not taken into account when filing an application by the taxpayer serve as a guarantee of personal income tax refund.

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Who will need code 311

Income for individuals comes in different forms—monetary and non-monetary. In addition, these may be payments from an employer, entrepreneurs, self-employed people, other companies or individuals engaged in private practice:

• receipt of money or property as payment for labor;
• receipt of funds as payment under civil contracts for the performance of work or services;
• crediting or settlement from the provision of licensed services to intellectual property owners;
• crediting funds for the sale of intellectual property or settlement with the copyright holder;
• other income.

If, when filing 2-NDFL, the employer makes an error or inaccuracy in the coding, the tax authority will fine it. To avoid a fine, you can submit corrected returns yourself, before the tax authority identifies the error, or avoid inaccuracies when filing your return.

What type of deduction is coded under number 311

Property tax deductions are included in reports 2 and 3-NDFL. They come in two encodings:

• 311 - money that the taxpayer spent on construction on his own, or on the purchase of a new house, apartment, share in property, land plot for individual development;
• 312 - expenses that were spent on repaying targeted loans, interest or refinancing loans spent on the development or purchase of the same property as in code 311.

The following can exercise the right to tax deductions using codings 311 and 312:

• tax residents of the Russian Federation, that is, citizens who were in the territory of the Russian Federation for 183 days or longer during the last 12 months before filing the declaration;
• buyers who can document the transaction and ownership;
• individuals who have never previously exercised the right to this tax deduction, if their right has been wasted, then the deduction can be issued to their legal spouse;
• individuals who received official income in the specified period and had a tax of 13% withheld from them;
• those citizens whose loan and purchase transaction was concluded with a non-dependent person;
• buyers, if the transaction was concluded for the purchase of real estate in the Russian Federation;
• individuals who paid the costs of the transaction from their own savings or through borrowed funds.

A more detailed description of codes 311 and 312 can be found in the Tax Code of the Russian Federation in Article 220, paragraph 1, subparagraphs 3 and 4.

Legislative acts on the topic

Legislative acts are represented by the following documents:

Common mistakes

Error No. 1: An attempt on the part of the child’s mother, who has filed a divorce from his father, to receive a standard double tax deduction for the child on the basis that she considers herself the only parent.

Comment: A divorced parent is not considered the only parent even if the child’s father does not provide child support.

Error No. 2: An employee who is a mother wants to receive the standard deduction for children in double the amount based on the refusal of the ex-spouse deduction in her favor, while the woman managed to remarry.

Comment: When a child's mother divorces his father and remarries another man, her new husband becomes the child's caregiver, regardless of whether he adopts the child or not. And the ex-spouse will continue to enjoy the tax deduction.

How else can you use the deduction?

When calculating the deduction, state support funds are not taken into account. For example, maternity capital, military mortgage or housing certificates from the regional administration. Such government assistance is not reflected in the tax base. And funds spent on home decoration can be included in the limit amount up to 2 million rubles. But for this, certain nuances must be observed:

• if the housing was purchased from the developer, and the text of the purchase and sale agreement indicates that unfinished living space has been sold;
• The text of the purchase agreement states that the living space being sold is sold without finishing.

If the text of the contract specifies that the apartment has no repairs, not finishing, then the deduction may be denied. For the tax service, repair and decoration are not synonymous. Therefore, it is important to comply with this wording.

The buyer of an apartment can include the following finishing costs in the property deduction:

• materials for repairs;
• payment for the work of the construction team;
• payment for drawing up estimates and design of finishing works.

There is no clear list in the legislation, but the expenses incurred must be appropriate in meaning. Costs that are not directly related to finishing work may not be included in the property deduction amount. Expenses will be approved for:

• installation and dismantling of windows and doors;
• installation of flooring, tiles, kitchens, ceilings, bathrooms;
• painting or wallpapering walls and ceilings;
• laying communication systems - water supply, heating systems, electrical wiring.

To confirm expenses, checks, acts, receipts, payment orders are suitable, which clearly indicate what the payment was made for. You can include materials in expenses, even if you carried out all the repair and installation work yourself. You can specify any materials - doors, windows, primer, wallpaper. But a drill, an air conditioner or the price of a kitchen set cannot be included in the deduction.

You can include the amount of finishing not in the deduction for the decoration of the apartment, but in another period. If this year the accrued tax amount is less than the deduction, then the balance can be carried over to the next year and so on until the entire allowable amount is returned.

Deduction code 327 in personal income tax declaration 3 how to set a password on a computer

Attention

These include: purchasing housing, paying for educational and medical services, contributions to charitable purposes, to non-state pension funds (as a voluntary additional pension) and insurance companies. To return part of the expenses, you must fill out the 3rd personal income tax declaration or contact your employer.

Important! To receive a deduction, you need an official source of income from which tax is withheld and transferred to the budget. Failure to do so will result in the inability to receive a refund.

In addition, the above production methods can be combined.

However, one deduction can only be used once. For example, reimbursement of voluntary pension contributions can be obtained from the employing organization, and for reimbursement of medical expenses you should contact the tax authority.

Important! The amount of deductions should not exceed 120,000 per year.

• Under GP contracts for services or performance of work (remuneration to performers).
• Under licensing agreements (license payments to copyright holders).
• For transactions of alienation of exclusive rights to intellectual property (redemption payments to copyright holders).
• Under agreements with authors of works.

By issuing remuneration to individuals in the above cases, firms, entrepreneurs and “self-employed” private practitioners become tax agents for personal income tax, and therefore their responsibilities include:

• calculate the tax, withhold it from the amounts paid and transfer it to the budget for the individual;
• report on paid income and personal income tax amounts to the tax office.

At the moment, the Tax Code of the Russian Federation provides for three types of standard tax benefits.

1. 3000 rub.

The maximum deduction amount is 120,000 rubles (last paragraph of Article 219 of the Tax Code of the Russian Federation). Moreover, this restriction is imposed collectively on deductions related to the payment of contributions to non-state pension provision, voluntary pension insurance, life insurance, medical expenses, training expenses and the cost of paying additional pension contributions.

Section 4 is intended for social tax deductions in the 2-NDFL certificate. This is where the deduction for the amount of pension contributions paid to a non-state pension fund or to an insurance organization for voluntary pension insurance will go.

If the deduction is provided on the basis of a notification from the tax authority, then its details should be indicated in this section of the certificate.

The Tax Code is the main collection of laws in this area.

The most common question taxpayers ask is how can they take advantage of the contribution cost relief? You need to act according to the instructions:

1. Fill out the declaration, indicating personal information, information about income received and all expenses, as well as contributions made to funds;
2. Take a 2-NDFL certificate from your employer for the previous year, which indicates the taxes withheld;
3. Prepare a copy of the agreement with the fund; when insuring, this document may not be present; its role is played by the policy;
4. Take checks or receipts that contain the actual expenses incurred - they can be paid either one-time or annually (the second option is preferable if the total amount of insurance compensation exceeds 15,600);
5. Provide the tax authority with a package of documents - do not forget to take the originals with you for the inspector to review.

Thus, the state gives the taxpayer the right to choose a convenient method for receiving paid expenses for established purposes. At the same time, when receiving a deduction through the employer, do not forget that when submitting the declaration to the inspectorate, it must be reflected there.

Digital deduction codes for personal income tax in 2020 are needed by firms, entrepreneurs and “self-employed” private practitioners to fill out reports on Form 2 of personal income tax in cases where remuneration was issued, taxed at a rate of 13%, to individuals who are tax residents of Russia.

The BukhSoft program will automatically calculate the remuneration due to the employee, apply the deduction and accurately determine the amount of personal income tax to be paid to the budget.

Ivanov paid contributions under a voluntary personal insurance agreement in the amount of 15,000 rubles. There were no other standard and social deductions in 2020. We will show how Ivanov will reflect the amount of the benefit in the 3-NDFL declaration.

See below for a fragment of the 3-NDFL declaration.

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In double the amount if the second adoptive parent refuses the deduction - for the third and each subsequent child (adopted) not older than 18 years, including full-time students, graduate students, residents, cadets, interns under 24 years of age148

In double the amount if the second parent refuses the deduction - for:

• a disabled child not older than 18 years (his own),
• disabled person of group I or II (his own) up to 24 years old, full-time student - student, graduate student, resident, intern

In double the amount if the second adoptive parent refuses the deduction - for:

• a disabled child under 18 years of age (adopted),
• disabled person of group I or II (adoptive) up to 24 years old, full-time student - student, graduate student, resident, intern

An individual tax resident of Russia can reduce income taxed at a rate of 13% by the following amounts.

Deduction 327 in the declaration is the amount paid by the citizen for the past period under the following items:

• deductions under agreements with NFP for non-state pensions paid in favor of oneself or close relatives;
• contributions for voluntary pension insurance, made both for yourself and for close relatives;
• deductions under life insurance contracts concluded on a voluntary basis, the minimum contract term is 5 years.

Expenses under code 327 are indicated in 2-NDFL, if the deduction is issued through the employer, and in 3-NDFL, if you want to receive it through the tax office.

In the income certificate of an individual, this code is indicated if the person applies for a deduction for pension insurance from the employer, having previously notified him.

In this regard, he will have to fill out tax reports.

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The question arises: is it necessary to indicate code 327 in 3-NDFL if a tax deduction for it has already been provided by the employer? If this code is present in the 2-NDFL certificate, then all data from this document should be transferred to the 3-NDFL declaration. It is important to indicate that this benefit has already been taken advantage of.

In this case, in the field “Amount of deduction from the tax agent (code 327)” you should indicate the Amount of contribution that was paid in the reporting year. Well, if you want to return 13% of the money paid, then in this case put 0 in this field, and the program will calculate the tax to be refunded.

If you need personal advice or assistance in preparing the 3-NDFL Declaration, as well as in sending documents through the taxpayer’s personal account, feel free to leave a request.

But only within 120,000 rubles. per calendar year.

1. The cost of treatment is payment for medical services and medications according to the list from the Russian Government Decree No. 201 dated March 19, 2001, as well as VHI contributions.
2. The cost of education is for yourself, your sisters, brothers and children under 24 years of age, as well as wards under 18 years of age.
3. Spending for charitable purposes.
4. Cost of independent qualification assessment.
5. Pension additional contributions.
6. Spending on voluntary pension savings.
7. Payment for voluntary life insurance if the contract term is five years or more.

For social deduction codes in personal income tax certificate 2 2020 (section 3), see table 2.

Table 2.

• 500 rub. every month without a limit on income for the year.
• From 1400 rub. up to 12,000 rub. every month for one child - up to the month in which the amount of income accumulated since the beginning of the year exceeded 350,000 rubles.

For standard deduction codes in personal income tax certificate 2 2020 (section 3), see table 2.

Table 1. Codings by types of standard benefits

Coding Tax benefit 104

In the amount of 500 rubles. per month:

• disabled people of groups 1 and 2;
• disabled since childhood;
• bone marrow donors;
• juvenile prisoners of fascist concentration camps;
• Heroes of the USSR or Russia, etc.

3000 rub.

In the 2-NDFL certificates submitted in 2020, section 3 reflects the codes and amounts of income, as well as the following personal income tax deductions:

• payments that are not subject to personal income tax within the limit (daily allowance, financial benefits, etc.);
• professional deductions;
• amounts that reduce the tax base in accordance with Articles 213.1, 214, 214.1 of the Tax Code of the Russian Federation.

In section 3 of the 2-NDFL certificate, tax deductions are shown opposite the corresponding income.

In this case, the tax base is reduced by the amount of deducted contributions, but not more than 120,000 rubles, and the actual tax paid is reduced by 13% of this amount.

A taxpayer who makes voluntary contributions to the above funds has the right to a refund of the tax paid through the Federal Tax Service. It belongs to the section of social tax deductions. To do this, a citizen must fill out a 3NDFL declaration.

Where should I put this code? It should be indicated on sheet E1 intended for deductions:

• standard benefits for parents for children up to an income of 350 thousand rubles.

Even if you paid contributions to a non-state pension fund, underwent paid treatment and at the same time spent money on educational services.

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Thus, information on code 327 will be useful to taxpayers who have entered into agreements with insurance companies or for voluntary pension provision. You must indicate the amount of expenses incurred in the declaration to refund part of the taxes, and if the benefit is provided by the employer, you can find this information in the 2-NDFL income certificate.

If a deduction under code 327 has already been issued at the enterprise, then in this case it is not necessary to submit a 3-NDFL income tax return to the Federal Tax Service. But there are cases when the taxpayer wants to return the money, for example, for the purchase of an apartment.

Important

Expenses are reimbursed within the limits of the listed amounts, but not more than 3,000,000 rubles per object.

Social deductions

For their application, the provisions of Article 219 are taken into account:

1. 320 – amounts spent on training. This code for calculating personal income tax provides only for the personal study of an employee or his brother/sister under the age of 24;
2. 321 - this code reflects full compensation for the education of a child, his own or a ward, until he reaches the age of 18. After this, the maximum amount limit in the regulatory act should be clarified;
3. 324 – amounts for calculating personal income tax spent on the treatment of an employee and his family members in medical institutions, as well as the purchase of medicines in accordance with the approved list.

Maximum compensation – 120,000 rubles;

• 325 – expenses for contributions under voluntary insurance of the employee and his family members.

Who will not receive the right to deduction using code 311

The IRS will not approve a property deduction under code 311 if you:

• are not considered a tax resident of Russia;
• you buy living space or land for development outside the territory of the Russian Federation;
• you cannot confirm the purchase and sale of the property;
• have already used their right to 2 million rubles and received a deduction earlier;
• purchased property from a relative;
• received housing as an inheritance or gift;
• did not receive income or wages from which 13% income tax would be withheld;
• did not carry out settlement of the transaction and are not the owner of the object or the legal spouse of the buyer.

Example of calculation using deduction code 311

The employee is a tax resident of the Russian Federation, lives in Kaluga and receives a salary of 60 thousand rubles. In 2020, he purchased housing for 1.3 million rubles. The housing has been renovated:

• cost of purchased materials - 100 thousand rubles;
• the work of a team of construction workers - 200 thousand rubles.

A loan was issued for the purchase of a home. For the use of borrowed funds in 2020, the bank paid 100,000 rubles in interest. An employee will be able to claim a property deduction in the amount of 1.7 million rubles:

1. 1.6 million rubles. (1.3 million + 100 thousand + 200 thousand) - expenses for purchasing an apartment, materials and finishing.
2. 100 thousand rubles. - interest paid.

An employee will have the right to reduce the tax base if he contacts his employer or directly to the tax authority. The total amount from which the calculation will take place is 1.7 million rubles. That is, the amount of the deduction reaches 221 thousand rubles, which is 1.7 million * 13%. Of which 208 thousand rubles. deduction for the purchase of living space and 13 thousand rubles. on interest paid.

It's important to note that mortgage interest does not carry over to other properties, unlike the rest of the unused deduction on the home itself. In this example, the citizen has 39 thousand rubles left, which he can claim when purchasing other suitable property.

The employee will not be able to select the entire deduction in one year with a salary of 60 thousand rubles, then the remaining portion will be transferred to the next year. The government will not withhold tax until the full amount of the deduction has been used. If income remains the same, then the 13% tax will not be levied for 2 years and 4 months:

• 60,000 * 13% = 7,800 - monthly income tax;
• 221,000/7,800 = 28.3 months - 2 years and 4.3 months.

Then the employee’s income tax withholding will resume. But only on the condition that he does not exercise his right to the remaining 39 thousand deductions.

Deduction 104 in personal income tax certificate 2

Personal code 104 provides for a payment of 500 rubles monthly for the entire duty period. This deduction is intended for citizens who have committed some important actions for the state. What is the designation 104 deduction code in personal income tax certificate 2? To whom can it be provided? The following are entitled to a deduction:

• WWII participants, heroes of the USSR;
• citizens who have received orders and awards of state significance;
• individuals who participated in eliminating the accident at the Chernobyl nuclear power plant;
• disabled people since childhood, as well as persons with 1st or 2nd group disability.

The purpose of personal income tax certificate 2 is to fully reflect all possible types of income of a working employee. The employer fills out such certificates and all documentation is submitted to the Federal Tax Service. All calculations are made only from the worker’s salary; the employer (tax agent) does not waste his money on paying personal income tax.

Note! If the total earnings of a citizen for the entire reporting period are higher than 280,000 rubles, the procedure for providing a deduction is canceled.

Sample of a completed certificate for personal income tax form 2

What documents to provide

To qualify for a deduction, provide supporting documents or scanned copies of:

• passport if you personally contact the tax authority;
• a certificate confirming ownership, if the property was registered before July 1, 2020, if later, then an extract from the Unified State Register of Real Estate;
• contract for the purchase of an object;
• the act of transferring an object into ownership;
• payment documents - receipts, bank statements, checks;
• if a mortgage has been issued, then a loan agreement and a certificate from the bank about the interest paid;
• 2-NDFL, if you submit a return for deduction yourself;
• documents that confirm the payment for the object or construction costs.

In the example above, the employee receives the simultaneous right to two deductions under codes 311 and 312. This information will be reflected in 2-NDFL when filing a return through an employer or 3-NDFL when independently submitting a report to the tax authority.

In the second case, the tax office reviews the documents and conducts a desk audit up to 3 months from the date of filing the declaration. It then refunds the previously withheld tax to the taxpayer's bank account specified on the application. If the required deduction and accumulated interest are not exhausted in one year, then next year you will need to submit 3-NDFL again. The procedure is repeated until the state compensates the entire amount.

What has been changed in the list of deduction codes?

The adjusted table of deduction codes has retained the main set of codes used in the old table, but at the same time a number of codes have been excluded from it, new ones have been added, old codes have been replaced with new ones, and deduction description texts have been adjusted.

Broken down by type of deduction, the changes look like this:

• Standard codes - excludes codes 114-125. Codes 126–149 have been introduced instead. Now they differ depending on who the deduction is provided to: natural parents (adoptive parents) or persons who replace them.
• Reducing the base according to Art. 214.1 of the Tax Code of the Russian Federation (transactions with securities and financial instruments of forward transactions) - in codes 205–207, instead of expenses on operations with financial instruments of forward transactions, expenses on operations with derivative financial instruments are now indicated, and codes 209–210 reflect no loss on operations with financial instruments of futures transactions, and losses on transactions with derivative financial instruments. Additionally, code 208 was introduced, which reflects losses on transactions with derivative financial instruments.
• Reducing the tax base for securities lending transactions in accordance with Art. 214.4 - instead of code 221, which was used to reflect the amount of expenses on transactions with securities accounted for in an individual investment account, codes 225–252 were introduced. Codes 250–252 have been added, reducing the tax base for transactions accounted for on an individual investment account in accordance with Art. 214.9 Tax Code of the Russian Federation.
• From investment tax deductions provided for in Art. 219.1 of the Tax Code of the Russian Federation, code 617 is excluded.

We invite you to familiarize yourself with: List of documents for registering an apartment in the Rosreestr