Zero PIT for the youth until 26 years of age

As of the 1 August 2019 a new exemption was added to the provisions of the Act on personal income tax, for the income earned by the tax payers until turning 26 years old. The employers for the first time will take the new relief into account already on the payment of remunerations in August, on the condition that they will receive a respective application of the employee for applying of the exemption.

The new exemption for the income obtained by the tax payer until he/she turns 26 years of age is stipulated by Art. 21 section 1 point 148 of the Act on personal income tax, added on 1 August 2019. It stems from the regulation that the exemption shall apply if the following conditions have been met jointly:

• the income earned constitutes income from work, official relations, tolling work or cooperative employment or income from a commission contract;
• the income has been obtained by the date of turning 26 years old by the tax payer;
• the limit of the exemption has not been exceeded, that is PLN 85 528 in the tax year (except for 2019, in which the exemption limit amounts to PLN 35 636.67).

The tax exemption does not comprise all the types of income subject to taxation with the personal income tax. It comprises only the income from work and commissions. Other income (for example income from the non-agricultural business activity or revenues from the contracts for specific work) does not enjoy the exemption.

It shall be emphasised that in principle the remitter is not obliged to apply the discussed exemption from the personal income tax, while calculating of the advances for the tax on the income obtained in 2019 (see Art. 5 section 2 of the amending Act).

The exemption discussed in Art .21 section 1 point 148 of the Act on the personal income tax will be then only taken into account by the tax payers at the stage of filing of the tax return for the year 2019. However, it will be different if the tax payer files the remitter a written statement that the income obtained thereby in the period from 1 August to 31 December 2019, from the titles stipulated in Art. 21 section 1 point 148 of the Act on the personal income tax will be in whole exempt from the tax on the basis of the regulation. The remitter that will receive thereof, will be exempt from the obligation of collection of the advances for the personal income tax for such an employee.

PIT 0 for the youth exemplar of the statement – download