Law and Justice is preparing changes to PIT for single parents. Instead of a preferential form of settlement, there will be a child allowance of PLN 1,500. – With the PLN 1500 relief, only the group of the lowest earners will not lose – Małgorzata Samborska from Grant Thornton commented for TVN24 Biznes.
During Thursday’s session, the Parliamentary Public Finance Committee endorsed the amendment changing the accounting rules for single parents. The preferential form of settlement, which consists in joint settlement with the child, is to disappear. Instead, there is to be a relief for a single parent’s child in the amount of PLN 1,500.
We asked Małgorzata Samborska from the Grant Thornton consulting company about the planned changes. – The change is obviously unfavorable for single parents, especially for those with higher earnings – assessed Samborska.
A single parent – changes in PIT
As she indicated, today the maximum benefit for a single parent may amount to almost 13,000. zloty. – If the parent would settle accounts on their own after exceeding 85,528,000 the tax base would have to pay 32 percent. income tax. Settlement with a child (who has no income of his own) means the right to calculate a double tax on the amount twice as low – explained Samborska.
This means that if a single parent earning PLN 171,056 per year, i.e. twice the amount from which the second tax threshold begins (PLN 85,528) or more – his benefit will be the highest. – With self-settlement, he would have to pay 32 percent. income tax. With a joint settlement, the whole will be subject to a 17% rate. So the difference between the 17 percent rate. and 32 percent from the amount of PLN 85 528 thousand is the value of the benefits – PLN 12,829.2 – she indicated.
Małgorzata Samborska from Grant Thornton emphasized that “The Polish Order, which introduces a high free amount of PLN 30 thousand and a higher tax threshold – PLN 120 thousand, would mean even greater benefits for single parents.”
This, however, is about to change due to the amendment supported by the majority of the parliamentary committee. – With the 1,500 PLN tax relief, only the group of the lowest earners will not lose any tax deductions, Samborska pointed out.
A new relief for single parents – who will lose?
Below, we present calculations prepared by the adviser, which show the benefits of settling a single parent with a child, if the tax act under the Polish Deal would become effective without this amendment.
What if the amendment goes into effect? The settlement together with the child will be abolished, so we only need to take into account the tax resulting from self-settlement. In this situation, in the case of a salary of 3 thousand. The amount of self-settled tax (PLN 1020) is smaller than the proposed relief (PLN 1500), so the taxpayer will not feel the change. In the case of higher earnings – 3.5 thousand, 5 thousand. or 7 thousand PLN – the tax already exceeds the amount of the allowance, so the change is unfavorable.
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