On 01 August 2019 amendment of the PIT Act entered into force. All employees who have not reached the age of 26 until August 2019 receive an income tax benefit, which is the complete absence of PIT tax. The benefit applies to almost all types of employment contracts, except for contract of mandate (umowa o dzieło), internship or graduate contract, and is not available to self-employed.
Despite the fact that the number of signed contracts does not matter, the income limit eligible for the tax credit should not exceed 85 528 PLN gross per year, which means no more than 7127 PLN per month. Due to the fact that the income threshold is proportionate, 2019 will be an exception, and the income cannot exceed 35 636.67 PLN until the end of the year. It is also noted that income from January to July is taxed, as before.
How to claim tax relief? There are two options for obtaining an income tax exemptions: a tax return and an application.
If you choose the first option as an employee under 26 years, you continue to work and get paid, and when submitting the annual pit declaration, the tax office determines the overpayment and return the relevant amount to the account of the employee. The second option is to submit an application to the employer, which will indicate that income from August 1 to December 31, 2019 is not subject to income tax. Such an application can be submitted only in 2019, from 2020 the employer will not automatically pay advance payments on income tax. After receiving such an application, the employer ceases to pay advances, and this amount adds to the salary of an employee who has not under 26.
Before, all taxpayers have been taxed on a progressive scale of taxation at which the rate is 18%, and after exceeding the annual base of 85,528 PLN increases to 32%.