The Income Campaign for fiscal year 2020 enters its final stretch. The deadline to present the return, which started on April 7, ends on June 30 and five days before for those taxpayers with a result to pay the treasury who choose to domicile the payment. Thousands of Spaniards, however, have timed out waiting to see if the Tax Agency and the State Public Employment Service (SEPE) crossed the data corresponding to the undue disbursement of unemployment benefits linked to the millions of Regulatory Files of state employment (ERTE) deployed during the past year to contain the labor haemorrhage caused by the Covid-19 crisis on pain of ending up paying extra taxes.
Although the filing of the income statement of an employee with a single payer is normally a simple operation based on the draft prepared by the Tax Agency -except for particular circumstances that make the process difficult- this year two particularities of the year 2020 come into play that they have been complicating the campaign.
The novelty of the double payer
In the first place, there is the fact that some 327,000 affected by ERTE who under normal circumstances would not have had the obligation to present the income statement, because they paid less than 22,000 euros per year, are obliged to do so. This happens because having two payersIn this case, your own company and the SEPE that partially covers the salary reduction suffered with unemployment benefits, the threshold to declare falls to 14,000 euros (provided that secondary payers contribute more than 1,500 euros in the year).
Having a second payer does not imply per se that more taxes have to be paid, but it does usually entail the obligation to present the income statement to settle accounts with the treasury since, although the company usually withholds the IRPF corresponding to the payroll Payers such as SEPE make the full payment, so the Treasury must correct the rate to be applied on the overall amount received. However, there are two factors that can lead to these workers ending up paying more than their peers who were not affected by an ERTE. On the one hand, the current design of the income tax penalizes workers who receive between 14,000 and 18,000 euros per year. On the other, the retention applied by companies replicates in the autonomous type the stateTherefore, making the declaration in communities with higher regional rates ends up raising the final bill.
As a result, the Tax Agency expects that the current Income Campaign will end with 5.96 million declarations to pay, 5.7% more than the previous year, mainly due to the effect of ERTE, and 14.33 million to be returned, 1% less.
The undue payments of the SEPE
Despite these implications on the result of the return, these taxpayers would not have, a priori, more difficulties when filing the return. The real complication lies in the fact that during 2020 the SEPE made a significant -but undetermined- number of errors in the disbursement of unemployment benefits during the avalanche of extraordinary payments made, in many cases making excessive payments for which the citizen may end up paying taxes that do not apply to you.
Several scenarios are opened here. The first, and simplest, is the one in which the SEPE was immediately aware of its error, demanded the taxpayer return the money unduly paid and recovered it before January 1, 2021. In this case, even taking into account Considering the aforementioned particularities of having been subject to an ERTE, the affected person can file the return without major problem because the Tax Agency will only require him to pay taxes on the net balance received once the refund has been subtracted.
The problem occurs in the usual case that the SEPE did not claim for its error or in which it did not do so until the beginning of 2021. In this case, the financial information of the taxpayer available to the Treasury at the start of the Income Campaign included the full payment, including the amount unduly contributed, and the treasury will demand taxes for the total amount, even if the SEPE ends up demanding that the taxpayer return the money.
Thus, a worker who receives 30,000 euros from his employer and 7,000 from the SEPE during 2020 would have to pay a total of 6,686.99 euros of personal income tax for a total income of 37,000 euros for the entire year. But if the SEPE had paid an additional 5,000 euros by mistake, the Tax Agency will require the affected person to pay taxes for an income of 42,000 euros and pay him 8,302.64 euros in taxes despite the fact that the SEPE will end up demanding that he return the 5,000 euros unduly subscribers. The example gives an idea of the consequences that this situation may have, despite the fact that the average excess in erroneous payments made by the SEPE is actually around 1,000 euros, according to the Ministry of Labor.
Aware of this problem, the Tax Agency has devised a system that allows correcting the amount actually collected for the one that should have been received, so that the draft of the Income only implies the payment of personal income tax on the amount that will end up being kept.
The drawback is that many taxpayers continue to ignore to this day what is the figure that they should have received from the SEPE, since it has not come to inform them of it nor has it claimed the amount that was wrongly entered. Work, however, streamlined the credit review process to report directly to the Tax Agency of the amounts for which the tax should be collected for the Income Campaign.
The shipment has been made progressively in several packages, which has caused important variations in the draft of the taxpayers’ declaration at this juncture depending on the moment in which they have consulted it or the crossing of data between Work and Treasury.
The declaration, step by step
In all cases, when going to the draft of the Income in the Tax Agency portal, this will indicate to the interested party that “additional information is requested for the transfer of tax data corresponding to the declarant”, among which will appear a payment of the SEPE that can be reviewed to include in the declaration.
When accessing it, it will be possible to verify that a payment from the State Public Employment Service is recorded in the concept of “unemployed” which, to give an example provided by a Human Resources department, amounts to 1,710.62 euros. In turn, they are listed as “deductible expenses” 123.78 euros. This amount is the contribution of the amount corresponding to Social Security contributions.
Once its incorporation to the draft has been accepted, a notice is opened informing that “you have received from the SEPE benefits derived from a Temporary Employment Regulation File (ERTE)”. And he adds: “The amount that you must enter in your personal income tax return will be the difference between the amount that you initially received by ERTE and the amount that you must reimburse (regularized amount).”
After accepting, you access a window with the title “Work income: ERTE regularizations”. It includes the “benefits received by the taxpayer, paid by the SEPE”, detailing the amount received in the year (1,710.62 euros); the retention practiced (which is zero, so it is blank); deductible expenses (123.78 euros for Social Security); and the applied reductions (also zero and blank).
The crux of the matter is in the heading located just below “Adjustments of payments made by the SEPE”, which contains the two key boxes. On the one hand, “amounts unduly received, paid by the SEPE corresponding to ERTE”, which is the overpaid. Below are the “amounts to be declared as unemployment benefits paid by the SEPE”, from which it is clarified that “this amount will be transferred to the declaration as a result of the process carried out by the SEPE”.
This is where the amount that originally should have been received must appear, and for which it must be effectively taxed. Several avenues of action are opened here, depending on the circumstances of each taxpayer.
Fill in the key box
A first option, which has become more common as the campaign progressed and the exchange of data between the different administrations, is that both boxes appear already filled in, indicating, for example, that the taxpayer should only pay 509 euros. This means that the Tax Agency has already received the information from the SEPE and that it is enough to accept to access the draft with the final data.
Second, if they are blank, but the SEPE has already demanded the return of the corresponding money, it is enough to include the repayment above, which will be subtracted from the one initially received and throwing the result in the second box so that the draft collect accurate information.
A third option, if you have not received such information from the SEPE, is to try to get it through its website where, in some cases, in the “Payroll Receipts” section a notice appears informing of the amount of the undue collection that has been received.
The fourth possibility is that both boxes remain empty, the SEPE has not communicated with the taxpayer and its website does not contain information about the improper payment. In this case, the advice of the Tax Agency has been to speed up as much as possible the deadlines for filing the Income while waiting to have the data through some of the indicated channels.
In the event of not being able to get the information on time, the taxpayer must also file the return, although once they settle accounts with the SEPE, they should request a correction from the tax administration to correct the figures and recover the excess taxed money. . The same is true for those who have already accepted the draft information without having the complete information. After all, filling in this box or not can easily mark the difference between a return with a result to be entered in favor of the taxpayer or to pay to the treasury.