Child tax credit in 2021 - what you need to know?

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Published: March 10, 2016

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So, you have a child, or maybe even two. Did you know that you have the right to deduct your personal income tax every month? This is the standard child tax credit. It is regulated by Article 218 of the Tax Code of the Russian Federation.

It means that every month part of the salary will not be subject to personal income tax, which is 13%.

• Who is eligible for this deduction?
• How to calculate the tax allowance for a child in 2021? An example of calculating START for children in 2015
• An example of calculating START for children in 2016-2017

general characteristics

Personal income tax deductions are available to all working people with one or more minor children. Upon reaching 18–24 years of age, they continue to be provided if the child is a student at an educational institution or undergoing an internship (for example, has the status of an intern, resident, etc.). The following are entitled to receive them:

The benefit in question is provided only to tax residents of the Russian Federation. It applies to cash receipts, taxed at a rate of 13%.

The frequency of the child deduction is every month until a certain amount of money is reached (for the year). When determining this value, you need to take into account 2 nuances:

1. Dividends are not taken into account.
2. The income of new employees is correlated with the data from the certificate in Form 2-NDFL.

As for the deduction for a student child, it is provided throughout the entire period of study. This includes taking into account documented academic leave.

Each example of calculating the standard deduction in question begins with determining whether all children are eligible for deductions.

EXAMPLE

T.M. Stepanova, manager of the trading floor of Guru LLC, brings up:

• youngest daughter (9 years old);
• son (20 years old), who is a full-time student at Moscow State University;
• An 18-year-old daughter who entered the evening department of a technical school.

Which children are eligible for the deduction?

Solution

The accountant of Guru LLC must reduce the base when calculating N.V. tax. Stepanova for her youngest daughter and son. Since the eldest daughter is studying at the evening faculty, she is not entitled to a deduction.

Also see “Spouse who is not the mother of the child is entitled to a deduction.”

Special cases when personal income tax benefits are not provided

A deduction cannot be granted if the parent:

• does housework, is not officially employed
• is registered with the employment center;
• pays taxes, but the principle of taxation does not provide for the payment of personal income tax;
• does not have official employment;
• is not a resident of the country.

In addition, a parent cannot take the standard deduction for a child under 18 who is married or early emancipated.

Another special case is maternity or child care leave for a woman. There are two options here. If a woman received a salary or other income subject to personal income tax for at least a month in a calendar year, then until the end of this year she will be provided with a monthly deduction. If there were no income tax deductions at all during the year, the employee cannot claim a tax benefit. However, during this period, she may not have any income from which personal income tax could be withheld.

In this entire topic, attention should be focused on one significant nuance related to the calculation of the amount of deduction for a disabled child . The nuance lies in the resulting alternative: should the deduction issued for such a child be added to the deduction of the standard amount, or should the maximum be selected from two deductions. Until recently, the explanations of the departments and the conclusion of the highest court of the Russian Federation differed. Let us explain the current situation.

Current amounts of standard deductions for children in 2021

The size of the amount that reduces the base for calculating income tax is influenced by a number of factors. One of them is birth order. The table below shows the deduction amounts.

For the purposes of deductions, the health status of the children, as well as their age, must be taken into account. In this case, the amount of deduction depends on 2 factors:

1. Having a disability.
2. What is the status of the parents?

Detailed information is provided here:

Medical services and drugs

Now let's look at the social tax deduction provided for expenses on medical services and drugs. Taxpayers who paid with their own funds during the reporting period are entitled to receive such a deduction:

• your treatment;
• treatment of your relatives (spouse, parents, children under 18 years of age);
• purchasing medicines for yourself and your relatives (spouse, parents, children under 18 years of age);
• contributions under voluntary personal insurance contracts for yourself and your relatives (spouse, parents, children under the age of 18).

For information about whose treatment does not give the right to a deduction, read the material “Social deductions for the costs of treatment of the spouse’s parents are not given .

IMPORTANT! The list of medical services for which it is possible to receive a social deduction is established by Decree of the Government of the Russian Federation dated March 19, 2001 No. 201.

The maximum amount of social tax deduction for medical services, as well as for educational services, is 120,000 rubles. The exception in this case is expensive treatment. In this case, the limits of the deduction are not limited, and it is provided in the amount of the full cost of such treatment.

IMPORTANT! In order to determine whether the medical services provided to you are considered expensive, you need to look at what code is indicated in the certificate of payment for medical services for submission to the tax authorities. The number 1 in the code field means that the treatment is not expensive, the number 2 means that it is an expensive treatment.

A social tax deduction can only be obtained if medical services are provided by organizations and individual entrepreneurs that have a state license to carry out medical activities.

Let's look at a few examples.

Example 1

In 2021, A.Yu. Krivov spent 20,000 rubles on the treatment of his child (aged 3 years). He also purchased medicines for his wife in the amount of 50,000 rubles. Both treatment and medications are included in the list approved by the Government of the Russian Federation. Krivov can reimburse the tax he paid in the amount of 9,100 rubles. ((20,000 + 50,000) × 13% = 9,100 rub.).

Example 2

Chernov I.B. in 2021 underwent complex eye treatment, which belongs to the expensive group, and spent 500,000 rubles on it. Consequently, he has the right to submit documents for a tax refund in the amount of 65,000 rubles. (500,000 × 13% = 65,000 rubles).

For an exception to the rule about having a license, read the article “You can get a deduction for treatment in Crimea even if the medical institution does not have a license .

Double size

Employees who:

The parent who refused the tax deduction must submit a corresponding application to the employer of the other parent (see letter of the Federal Tax Service No. ED-3-3/3636).

EXAMPLE

O.V. Kazakova received a double deduction at the enterprise ZAO Ryabina for her 7-year-old daughter in the amount of 2,800 rubles. In March 2021, the employee got married, but the husband refused the deduction for his stepdaughter in favor of his wife. What deduction should be given to the mother for March?

Solution

Since the new husband refused the required deduction in favor of his wife, O.V. has the right to reduce the tax base in double the amount of the deduction. Kazakova saved. Consequently, JSC "Ryabina" will provide a deduction in the amount of:

1400 × 2 = 2800 rubles.

ATTENTION

If the income of the second parent, who refused the deduction in favor of the spouse, has reached the limit of 350,000 rubles / year, the enterprise of the first should not provide him with a double deduction until the end of the reporting period.

Also see “Child Tax Credits in 2021: Limits.”

General concept of tax deduction

All citizens of our, and not only our, country are taxpayers. The obligation to pay taxes is spelled out in the main document of the country - the Constitution of the Russian Federation. Citizens are required to pay taxes in a variety of situations: someone rents out an apartment, someone sells cars, and someone simply goes to work and receives a salary minus taxes paid to the state budget.

In certain cases established by law, citizens can return the paid tax or part of it. To do this, you need to use a tax deduction. A tax deduction is an amount established by law by which a taxpayer’s tax base can be reduced. In other words, this is the amount of taxes paid, which a citizen has the right to return, and if the tax is not paid, not to pay legally.

A citizen has the right to claim a tax deduction provided that he is a taxpayer of personal income tax at a rate of 13%.

One type of tax deduction is social tax deduction , which we will consider in detail in our article.

Is a single parent always entitled to a double deduction?

In some cases, a parent may not have "single" status. For example, when the second spouse is deprived of parental rights, this is not a basis for exemption from responsibility to the child.

A similar situation occurs if one of the spouses is in prison and/or does not pay alimony.

Divorce cannot be the basis for providing double deductions. But in practice there are exceptions.

EXAMPLE

Can single mother A.V. receive a deduction? Petrov for 2 minor children, if by a court decision their father is deprived of parental rights?

Solution

Based on the letter of the Ministry of Finance No. 03-04-05/8-1215 A.V. Petrova does not have the right to a double deduction, since the lack of parental rights does not relieve the father of the obligation to provide for the child.

Documents for receiving a deduction

“Children’s” deductions are provided to the taxpayer by one of the tax agents who are the source of income payment, at the choice of the parent based on his written application and documents confirming the right to such tax preferences. At the same time, the norms of the Tax Code of the Russian Federation do not require that applications be submitted annually. The regulatory authorities also agree with this (letter of the Ministry of Finance dated February 26, 2013 No. 03-04-05/8-131). However, if the application states that the employee is asking for a child deduction specifically in 2016, then in order to receive a child deduction in 2021, he should submit a new application. It is worth noting that the Tax Code does not contain a list of documents necessary to confirm the taxpayer’s right to deduction. The composition of the documents confirming the right to deduction may differ depending on the specific situation (letter of the Federal Tax Service of Russia dated December 14, 2015 No. BS-4-11 / [email protected] ). Such documents, in particular, are:

• a copy of the birth or adoption certificate of the child in respect of whom the deduction is being claimed, as well as copies of the birth certificates of other children;
• a marriage registration certificate so that the spouse of a divorced parent can receive a child deduction;
• certificate of disability.

After the certificate expires, a new one must be submitted; as well as a certificate from the educational institution where the child is studying, if he is over 18 years old (such documents must be updated annually); an agreement on the payment of alimony or a writ of execution (court order) on the transfer of alimony for child support (if the parent pays alimony); a parent’s receipt stating that the second parent applying for the deduction is involved in providing for the child. This is necessary if the parents are not married, but the other parent provides for the child, although does not pay child support.

Start and end dates for provision

As a general rule, deductions for children are given monthly throughout the entire tax period (12 months) until the employee’s gross salary is 350,000 rubles. Such frequency and limit are established by tax legislation (Article 218 of the Tax Code of the Russian Federation). The restrictions apply until the start of the new year.

You can apply for a personal income tax deduction for children for the first time in 2021 from the month when the corresponding event occurred:

1. Birth of a child.
2. Adoption.
3. Establishment of guardianship or trusteeship.
4. The agreement on the transfer of the child to a family for upbringing came into force.

The deduction period expires when:

• reaching 18 years of age (condition: not enrolled in an educational institution full-time);
• when the student turns 24 years old;
• the expiration of the contract that gave the family the right to raise a child;
• marriage of a single parent (in this situation we are talking about receiving a double deduction; half of its amount will be taken into account when calculating the personal income tax of the second spouse).

Also, the right to receive a deduction is lost if the child dies.

In case of marriage, the Ministry of Finance believes that after the wedding the child is no longer supported by the parents. In such cases, no deduction is allowed.

EXAMPLE

In 2021, the employee was provided with a child benefit for her 23-year-old daughter, who was a full-time student at an educational institution. It later turned out that she has been married since December 2021. Did the organization have the right to provide the mother with deductions and what should be done?

Solution

According to the letter of the Ministry of Finance No. 03-04-05/14853, parents stop supporting their daughter after her marriage and no deduction is allowed.

However, tax legislation does not contain a direct prohibition on providing deductions in this case. If the company is afraid of claims from the Federal Tax Service, the employee must submit a written application requesting a recalculation. Based on this document, a clarifying 2-NDFL for 2021 is submitted.

Tuition deduction

social tax deduction we are considering is the training deduction. It is provided in cases where the taxpayer incurred expenses during the reporting period for his own education, or for the education of his children under the age of 24, or for the education of his wards under the age of 18.

There are several important points:

• firstly, in the case when a deduction is provided for children, a necessary condition is full-time (full-time) education; if a deduction is provided for training of the taxpayer himself, there are no restrictions on the form of training;
• secondly, the educational institution must have a state license to provide educational activities;
• thirdly, the deduction does not apply in case of payment for education using maternity capital.

Will a stepfather be given a deduction for a child’s education, see here.

The social tax deduction for training is established in an amount not exceeding 120,000 rubles, if the deduction is provided for the training of the taxpayer himself. In the case of a deduction for the education of the taxpayer’s children, its amount for both parents (guardian or trustee) will be 50,000 rubles. for each child.

Let's look at a few examples.

Example 1

In 2021, Petrov E.E. spent 200,000 rubles on his training. However, due to the fact that the maximum deduction is 120,000 rubles, he will be able to return funds in the amount of 15,600 rubles. (120,000 × 13% = 15,600 rubles).

Example 2

Kuznetsova G.N. spent 100,000 rubles on the education of her eldest son in 2021, and 40,000 rubles on the education of her youngest daughter. The maximum tuition deduction for each child is RUB 50,000. Consequently, she will receive 11,700 rubles in her hands. ((50,000 + 40,000) × 13% = 11,700 rub.).

You can also receive a deduction when studying abroad. Read more about this in the article “Studying abroad does not prevent you from receiving social benefits for personal income tax .

How children's deductions are processed

An employee of an organization who is entitled to receive a deduction must submit a corresponding application. To do this, you need to take a blank form from the accounting department and fill out a request. Compliance with all formalities will protect the company from penalties from tax authorities.

This document must indicate:

• amount of children;
• their age;
• category (student and/or disabled).

The completed sample is shown in the figure:

You can use the following link from our website to obtain such an application form and a sample of how to fill it out:

When a person signs an employment contract with several employers at once, a deduction can be received from one of them (at the employee’s discretion).

If a person has recently joined an organization, he provides a certificate from his previous place of work in form 2-NDFL. Based on this document, income for the past period from the beginning of the year is summed up and it is determined whether the limit of 350,000 rubles has been exceeded for 2021.

In addition, in the 2-NDFL certificate, codes are noted that provide complete information about the parents and children who are entitled to the deduction. The figure depends on the individual situation.

For more information, see “Codes and amounts of personal income tax deductions in 2021: table with explanation.”

Employees often may not know that they are or are not entitled to a child deduction. To prevent conflict situations, it is necessary to draw up a list of such events (memo) and familiarize the employee with it.

Read also

16.12.2018

Social tax deduction for donation

Let's start with donation and charity expenses. This is one of the least common types of social tax deductions that are used in our country. The state has established areas of activity for which a taxpayer can make a donation and receive the right to a social tax deduction . These include the religious sphere, healthcare, the development of science, sports and culture, as well as school and preschool organizations. The amount of tax deduction in this case will be no more than 25% of the taxpayer’s total income.

Example

Ivanov A.R.’s income for 2021 amounted to 1,500,000 rubles. In the same year, he provided charitable assistance to a preschool institution in the amount of 400,000 rubles.

First, let's determine the maximum amount of income for which Ivanov can receive a deduction: 1,500,000 rubles. × 25% = 375,000 rub. Therefore, the amount of funds that can be reimbursed will be: RUB 375,000. × 13% = 48,750 rub.

Deduction for payment of voluntary pension contributions to non-state pension funds

Another type of expenses for which you can receive a social tax deduction are expenses in the form of amounts paid:

• pension contributions under an agreement with a non-state pension fund;
• insurance premiums under a voluntary pension insurance agreement;
• insurance premiums under a voluntary life insurance agreement (agreements), if such agreements are concluded for a period of at least 5 years.

Such expenses are recognized in relation not only to the taxpayer, but also to his close relatives (spouse, parents, children, grandparents, brothers, sisters, etc. in accordance with the Family Code of the Russian Federation).

Deduction for payment of expenses for conducting an independent assessment of one’s qualifications

This type of deduction was introduced by Law No. 251-FZ of July 3, 2016, which came into force on January 1, 2017. You can take advantage of this deduction if you pay for an independent assessment of your qualifications. A deduction can be received in the amount of actual expenses, but the total amount of this deduction and other above-mentioned deductions (with the exception of deductions for the costs of educating children, expensive treatment and charity) cannot exceed 120,000 rubles. (Subclause 6, Clause 1, Article 219 of the Tax Code of the Russian Federation).

Deduction for payment of additional insurance contributions for funded pension

Another type of expenses for which you can count on receiving a social tax deduction are expenses in the amount of additional insurance contributions paid for a funded pension in accordance with the Law “On Additional Insurance Contributions...” dated April 30, 2008 No. 56-FZ. This deduction can be obtained upon presentation of documents confirming payment or a certificate confirming the transfer of such contributions by a tax agent.

The maximum deduction amount when paying pension contributions in both cases (voluntary pensions to non-state funds and additional insurance for the funded part of the pension) will be 120,000 rubles.