Tax deduction through an employer: how to obtain and process?

The amount of personal income tax that we transfer from all our income is only 13%. This is the lowest tax in the world, but its amount can be legally reduced. In certain circumstances, any working Russian can use the right to apply a property or social deduction. This can be done in two ways - by receiving a refund from the budget at the end of the reporting year, or by applying for a tax deduction through your employer. We will tell you how to do this below.

How are funds returned?

A tax deduction is a partial financial compensation (from the state) for taxes paid by a citizen. If these funds are received through the employer, then instead of transferring personal income tax funds to the tax (budget), he gives this part of the money directly to the employee along with wages.

Article 359. Tax base (Federal Law No. 146)

The only caveat: the funds are not issued in one payment, but are divided into equal parts and can be paid over an indefinite period of time (depending on the salary, which affects the amount of personal income tax paid by an employee).

When receiving compensation through an employer, the salary will be increased by 13%. These are the funds that the taxpayer previously paid to the state (money was automatically withheld from salary)

What types of tax deductions can you get from your employer?

You can only receive the following types of tax deductions from your employer:

1. Property. Provided for conducting real estate transactions (purchase of an apartment, house, land plot for the construction of residential real estate). The maximum limit is 2 million rubles (for a lifetime, not annually).
2. For a mortgage. The deduction comes from the interest paid. The main thing is the existence of an employment contract. If the taxpayer does not pay personal income tax, then he will not be able to claim deductions. The limit is the same as the deduction that is provided after purchasing a home (2 million rubles for a lifetime).
3. Social. This refers to the costs of treatment or training. This also includes insurance, purchasing and using health insurance.
4. Pension. But deductions can only be obtained for contributions to non-state funds.
5. Standard. Tax deduction for the birth and maintenance of a child. By the way, such payments are processed more simply; you do not need to contact the tax office yourself and you just need to submit an application directly to the employer.

Table. Types of deductions, legal grounds for application

Investment deductions cannot be obtained (they will require an individual investment account, the income from which is not paid by the employer).

If a citizen does not know whether he has the right to receive a tax deduction, then he can sign up for a consultation with the Federal Tax Service and clarify this issue with the inspector

Legislative acts on the topic

Advantages of receiving payments through your employer

There are several key advantages of receiving compensation through an employer:

• it is possible to draw up a deduction, including in the current year (there is no need to wait for the next year, but if you receive it by transfer to your bank account, then payments can only be received for the previous year);
• a minimum of bureaucratic procedures (take a certificate from the tax office and submit it to the accounting department);
• Payments can be received within a month after applying to the Federal Tax Service (otherwise you have to wait up to 4 months).

But it is worth mentioning that the taxpayer has every right to submit a notification to the employer to receive a deduction in the next year (and not just this year). The so-called “statute of limitations” for transactions that provide for a deduction is 3 years. All this time, the employee can contact the employer (but only if he continues to work for him and has not changed his place of work, an employment contract is also required).

Previously, until 2014, the application had to be submitted in person. Now you can contact the Federal Tax Service in most cases through the official portal

Deadlines

Readers are interested in what the maximum terms for providing compensation are at their place of work. So, after receiving confirmation from the tax office, you won’t have to wait. The first accruals will go to your next salary.

If, when submitting a declaration, when receiving a deduction in the standard way, you need to wait 90 days, then the application for issuing a certificate is considered in only 30 days. In addition, payment through the company does not require the end of the year: there is a waste, the basis for the return is confirmed and the funds are immediately paid.

We suggest you read: How to seize an apartment from your mother

Algorithm for obtaining a tax deduction through an employer

The general scheme for receiving a deduction is as follows:

1. Receive a certificate confirming your right to deduction . They issue it at the tax office. Accordingly, initially it is necessary to submit an application and all accompanying documents to the Federal Tax Service, with which the taxpayer may damage his right to financial compensation. This could be a purchase and sale agreement, an extract from a hospital, a copy of VHI (health insurance), an agreement with a non-state pension fund, and so on. The documents provided must necessarily indicate the amount with which it is planned to receive government compensation.
2. After receiving a certificate from the Federal Tax Service (takes about a month from the date of the first application), it is necessary to take it to the accounting department of the enterprise where the taxpayer works. You will also need to write an application requesting a tax deduction.

You don’t need to do anything else; you don’t need to provide any certificates to the employer either. All that remains is to wait for the salary recalculation to be completed (if the next salary is more than 1 - 2 weeks, then payments will begin to arrive from this month).

How to get a certificate from the Federal Tax Service?

There are two options:

• personal appeal to the tax office;
• filling out an online declaration (form 3-NDFL).

Form 2-NDFL is now not mandatory, since the employer is obliged to provide it for the employee. But in practice, information is not always transmitted to the Federal Tax Service in a timely manner. So it is recommended to request the completed Form 2-NDFL in advance from the accounting department of the organization where the taxpayer works.

The fastest way is to submit an online declaration on the official website of the Federal Tax Service . You just need to first obtain a login and password for the first login, and this can be done through the regional tax office (it is recommended to make an appointment in advance). You will only need to have your passport with you (if you apply at a place other than your place of registration, you will also need a TIN). Now, to log into the Federal Tax Service website, it is also possible to use a confirmed level 3 account from the State Services portal.

Submitting an application for a tax deduction is carried out through your personal account. The declaration must be certified with an electronic signature. If the taxpayer has previously received a qualified digital signature certificate, then you can use it. Otherwise, you need to issue a non-qualified certificate directly on the Federal Tax Service portal (such an electronic signature cannot be used to certify electronic documents; its validity period is 12 months from the date of issue).

Next you will need:

• log in to your personal account on the website nalog.ru (using the login and password issued by the tax office, it is recommended to change the password to any other);
• go to the “Life Situations” section, then – “Request a certificate (or other documents)”;
• select “Get a certificate confirming the right to deduction” (by selecting the required deduction option: social or property);
• fill out the step-by-step form (this is the declaration);
• if the employer has already submitted information on 2-NDFL to the tax office, then some of the data will be filled in automatically (you will need to indicate the employer using the interactive form);
• certify the application with an electronic signature (the digital signature must be installed on the computer, and also install the CryptoPRO plugin for browsers - the site can independently determine the signature certificate).

After sending the application, a tax certificate is provided within 30 days. A notification about its readiness will be sent directly to your personal account (in the notifications section, you can download an electronic copy certified with an electronic signature, or you can independently contact the Federal Tax Service office and receive it there in paper form).

To confirm the right to receive compensation for taxes paid, you must provide documents to the Federal Tax Service that confirm this possibility. There is no clear list of documents in this regard, but only for the expenses indicated in them (the amount of personal income tax paid) can you receive compensation

Features of receiving a tax refund in the form of a deduction from the employer

Collection of documents

Find out how to draw up a GPC agreement to avoid tax and administrative problems from the publication “Conclude GPC agreements correctly.”

Example

An employee of Perimeter LLC, a fitter at workshop No. 3, I. R. Sadykov, purchased an apartment in March 2021. He has a choice - to apply for a deduction:

• to the Federal Tax Service at your place of residence;
• at the place of work.

In the first case, more than a year will pass from the moment of purchasing the apartment until the personal income tax is returned (9 months before the end of the year, 3 months for a desk audit of 3-personal income tax, another month for the transfer of the “refundable” personal income tax to I.R. Sadykov’s account).

In the second case, you won’t be able to get a deduction right away either. It will take time to receive a notification from the tax authorities (to apply for a deduction to the employer). However, these time costs are significantly less than in the first case. And Sadykov I.R. will be able to start using the deduction within a month after contacting the tax authorities for notification.

Thus, applying for a deduction to the employer helps its recipient:

• Recoup your expenses faster. For example, the employer is obliged to provide a property deduction from the beginning of the year, regardless of what month the employee received the notification from the Federal Tax Service (personal income tax withheld from the beginning of the year until the month of receipt of the notification must be returned to the employee).
• Save time on registration and submission of 3-NDFL.
• Save your money from inflation and compensate for part of the expenses with the least financial and temporary losses.

An employer will provide these deductions if you:

• you work for a company under an employment contract and receive taxable income (13%);
• They brought a notification from the Federal Tax Service confirming the right to deduction and an application.

Find out about “children’s” tax deductions from this publication.

The main advantage of filing a tax deduction through your employer is the ability to spend more of your salary before inflation rises and the money loses some of its purchasing power. However, this is where the risk lies: if a citizen demands a return of funds from the country’s budget, the money will be credited to his account at the end of the year, when the money has had time to partially depreciate.

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The peculiarity of receiving a deduction at the place of work is that an employee of the company has the right to use the funds as soon as he completes the documents and takes them to the employer. In the case of the Federal Tax Service, the employee will need to wait 2-3 months, only then receive the funds. But the Federal Tax Service transfers the entire amount, and the employer – in parts, every month.

A set of papers for various types of deductions:

• Property: documents proving that the purchase and sale transaction took place (payment, paper on the right of ownership).
• For the child: birth certificate.
• For treatment: bills, certificates issued to the employee who submitted the application.
• For training: payment document, certificates.

The verification of the papers will last a month, then permission to return the funds will be issued.

From this day on, 13% will no longer be withheld from income until the maximum possible amount is transferred back to the employee. He can receive a deduction from the month in which he brought all the papers. For example, if they are issued in May, there will be no refund for April and March.

When buying a home:

1. application to the Federal Tax Service in the approved form;
2. certificate of ownership (or acceptance certificate);
3. contract of sale;
4. payment document proving the fact of payment.

When housing is purchased using a mortgage program:

• leaving a previous job,
• company reorganization.

Currently, there are no restrictions on receiving a tax deduction when changing jobs during the year. The deduction is processed by the employer as usual, and in case of dismissal, documents for the deduction are sent to the accounting department of the new employer. The only thing is that you will have to contact the Federal Tax Service again and ask to draw up a notification about the existence of the right to deduction.

To apply for a property deduction for two places of work, you need to make a note when drawing up the application about the proportions in which to distribute the deduction amount between employers.

Mistake #1. Waiting until the end of the tax period to apply for a property deduction.

The notification can be submitted at any time, and you will not have to wait until the end of the period for the money to be transferred to your account.

Mistake #2. You cannot fill out an application for a deduction when purchasing a home in the middle of the year.

You can apply for a deduction in the middle of the year; the balance of the amount due to the taxpayer for previous months will be received in the new year through the Federal Tax Service.

Property tax deduction is a type of relief of state significance, which is provided to bona fide taxpayers. If an employee makes regular personal income tax contributions to the budget, then he can receive a refund when spending on socially significant needs. You can arrange it in two ways:

• at the employer;
• through the Federal Tax Service.

The bottom line is that the state offers the citizen to receive some kind of compensation for certain types of expenses, including payment for educational and medical operations, as well as the purchase of living space. To receive a refund, you can contact the Federal Tax Service in person, through a legal representative or through your employer.

If an employee works at several enterprises at the same time, then he has the opportunity to receive a refund from each employer. But we are not talking about doubling the amount. You get the opportunity to simply return the assignment faster.

To provide a deduction, the employer needs to receive two documents from the employee: a notification from the Federal Tax Service (it confirms the right to the deduction) and a written application.

There is a form for an application for a social deduction for expenses on voluntary life insurance (given in the letter of the Federal Tax Service of Russia dated January 16, 2017 No. BS-4-11 / [email protected] ; see “The Federal Tax Service recommended the application form for receiving a personal income tax deduction from an employer for expenses for voluntary life insurance").

The employee receives the notification independently from the inspectorate. This document is issued for one calendar year. This means that the employer is required to provide the deduction during the year specified in the notice. The employee will have to receive a new notice next year. If he does not do this, he will no longer receive a deduction at his place of work.

The accountant should check that the notice is in the prescribed form. For property deduction, this is a form approved by order of the Federal Tax Service of Russia dated January 14, 2015 No. ММВ-7-11/ [email protected] For social deduction - a form approved by order of the Federal Tax Service of Russia dated October 27, 2015 No. ММВ-7-11/ [email protected] For a social deduction for expenses on voluntary life insurance - the form given in the letter of the Federal Tax Service of Russia dated January 16, 2017 No. BS-4-11 / [email protected]

Next, you need to make sure that the notice was issued specifically for the current year, and not for the previous year, and it contains the data of this particular employer, and not another one. Finally, you need to make sure that the notice contains correct information about the employee. If there are any errors or inaccuracies, the accountant must return the notice to the applicant so that he receives a new copy with corrected data from the inspectorate.

If an accountant has doubts about the authenticity of the notification, he has the right to contact the Federal Tax Service, which issued the document, and ask to confirm the issue. At the same time, the absence of an official seal does not indicate a forgery, since the notification form does not contain such details as a seal (see letter of the Federal Tax Service of Russia dated October 27, 2015 No. BS-4-11/18740; “The notification confirming the right to a property deduction does not provide affixing the official stamp of the inspection").

The notice must be kept for four years. This obligation is established by subparagraph 8 of paragraph 1 of Article 23 of the Tax Code of the Russian Federation, and officials from the Ministry of Finance of Russia recalled it (letter dated 09/07/11 No. 03-04-06/4-209). We add that it is advisable not to get rid of the original, even if the employee quits before the end of the four-year period.

Receiving a deduction when changing jobs

A change of job is not a reason to cancel payments. Upon receipt of settlement documents, the accounting department will provide additional information about the accrued deductions, as well as about the amount already paid. All this will need to be transferred to the accounting department of the enterprise where the taxpayer will work in the future. The interesting thing is that before 2014 there was no such opportunity. More precisely, it was possible to continue paying deductions from the new employer only from the next calendar year.

Receiving a deduction from several employment contracts

It also happens that a citizen works for several organizations at once, that is, he has 2 or more employers. Can he simultaneously receive a deduction from everyone? Since 2014, such an opportunity actually exists. Moreover, the taxpayer himself has the opportunity to distribute the amount of payments for each of them independently (this only applies to taxes withheld from wages). However, it is currently impossible to obtain 2 copies of certificates confirming the right to receive a deduction through the online portal. You will have to personally contact the regional tax office at your place of registration and resolve this issue individually with the inspector. It is also necessary to obtain form 2-NDFL from each employer.

Is it possible to carry forward the balance of the deduction to the next year?

Carrying over the balance to the next calendar year is allowed, but only for property deductions (social deductions “expire” at the end of the calendar year). You just need to re-apply to the Federal Tax Service in January to receive a new certificate confirming your right to deduction (indicating the remaining amount that was not paid this year). When applying to the Federal Tax Service, you will definitely need a 2-NDFL certificate for the previous reporting year, so the first thing you need to do is get it from the accounting department of the organization where the taxpayer works.

A basic algorithm for how to start receiving compensation for personal income tax paid through an employer. From the moment you contact the Federal Tax Service until the first payments, only 1 month will pass

In total, applying for a tax deduction through an employer is extremely simple; you can submit an application through the nalog.ru portal; in most cases, you will not need to personally visit the Federal Tax Service. You can apply for compensation for taxes in the current year, without waiting for the filing of a declaration from the employer. The funds paid by the state will be accrued along with wages, that is, it will increase by 13% (the current established amount of personal income tax).

Questions and answers

The easiest way to understand how tax deductions are spent is to use an example.

Citizen Sidorov bought real estate worth two million rubles in 2021. Sidorov's salary is 50,000 rubles per month, with 13% income tax (6,500 rubles). The tax deduction for the purchase of residential real estate is 13%, in this example it is 260,000 rubles.

This year, in May, he filed for a tax credit. This year he will receive compensation for 8 months (6500 * 8 = 52000 rubles). This amount is less than the required tax deduction in this case – 260,000 rubles. Next year 2021, he has the right to apply for tax deduction compensation again.

If he submits documents and applications in January, then for the year he will receive another 78,000 rubles (6500 * 12). The total amount of refunded taxes will be equal to 130,000 rubles, which is also less than the amount of the required deduction. Therefore, in 2021, he can also continue to reimburse the tax deduction by submitting documents to the tax and accounting department of the enterprise. This will happen until the amount of unrestrained income tax becomes equal to 260,000 rubles.

This can be done through the Federal Tax Service, and from 2021 the employer has the right to provide a tax deduction for the months preceding the application for a tax deduction. In this case, excessively withheld tax can only be returned to the employee’s bank account; receiving money from the company’s cash desk is prohibited by law.

Although the law allows you to receive income tax for the months preceding the filing of an application for a tax deduction, in practice this decision is still made by the company's accounting department. But citizens have the choice to agree and receive a tax deduction after filing a 3NDFL return for the year or to defend their rights under the law.

A frequent question that arises in practice is how the tax deduction is calculated if there are several places of work? Russian tax legislation allows you to receive a tax deduction from several employers. An important nuance: when registering a deduction at the Federal Tax Service office, you must inform what part of the deduction will be received from a particular employer.

Citizens receive a tax notice for the provision of a tax deduction for the calendar year at the declared place of work. That is, if you change jobs, the entire procedure for obtaining a tax deduction will need to be completed again. In this case, the application for a tax deduction will indicate the details of the new employer.

Through an employer, it is possible to receive compensation not only for your own expenses for purchasing housing, treatment or education, but also for expenses for your own child (purchase of an apartment in his name, payment for treatment or education of the child). The grounds for receiving these deductions remain the same

• Official employment of a company under an employment contract and receipt of wages, which are subject to personal income tax,
• Providing notification from the tax service about the possibility of obtaining a tax deduction.

As you can see, there are no difficulties in filing a tax deduction. It is important to collect all the necessary documents to submit to the tax office, and after receiving notification of the due deduction, provide it to the employer. The main thing to remember is the need to timely receive notification of the availability of a tax deduction at the end of the calendar year, when changing an employer, or when reorganizing the employer’s legal entity.

Question No. 1. I work not under an employment contract, but under a civil law agreement, can I claim a tax deduction from the head of my company?

No, the employee must be employed under an employment contract in order to be able to exercise his right to any deduction.

Question No. 2. I work part-time, can I ask my employer to issue me a tax deduction?

Yes, the length of the working day does not play a role in this matter.

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