Do I have to include scholarships on the income statement?

Do I have to include scholarships on the income statement? Not all scholarships have to be announced to the IRSBut there are some cases in which we will be bound. The key lies in the amount and type of scholarship we have received.

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In what cases do you not have to declare the grant?

Any support or assistance received by people who do not carry out economic activities is considered capital gain, therefore it must be announced before the treasury. Scholarships will be no exception to the general rule.

However, grants are usually awarded to people with economic problems, so there are some cases that have different treatment and are therefore tax deductible. In other words, scholarships do not always need to be included in the income statement.

clear case Scholarships that have special taxes. Of course, only those that meet a series of requirements. First of all, they should be scholarships awarded by public bodies or non-profit organizations. In other words, tuition assistance granted by the company you work for will not be exempted from your child.

In addition, it must be granted for a purpose take structured studiesBoth in Spain and abroad. This means that the title must be approved. This follows binding advisory number V1361-11 to the Directorate General of Taxation.

Finally, the award of scholarships shall be adjusted according to the principles of merit, ability, generality, and non-discrimination in access conditions, as determined by binding counsel V2607-16.

This excludes scholarships from departments or public entities intended only for their employees, spouses or children.
To ascertain whether it is tax deductible or not, it is necessary to refer to it in the assistance grant agreement. If you don’t have access to the document, the IRS has launched a free service that lets you know if you have to pay taxes on your scholarship. You just have to call 901 33 55 33 or 91554 87 70.

>> RECOMMENDED: IRPF (Individual Income Tax) courses.

Amounts are limited: if you exceed them, you will have to pay taxes on the scholarship

Within the tax-free cases we commented above, there are also limits to the amount received. Amounts that exceed the limits set by the Treasury must be taxed on the income statement.

These limits for non-payment of taxes on scholarships depend on the type of studies and where they are studied. In the case of tuition assistance to pay for a second-cycle university, the maximum will be 6000 euros per year in the 2021 income. On the other hand, for scholarships for transportation and accommodation expenses for third-cycle studies in Spain, it is 18,000 euros. The amount rises to 21,000 euros if they are transferred abroad.

Scholarships for doctoral studies amounting to €21,000 if conducted within Spain and of €24,600 if they are abroad are also exempt from paying personal income tax.

And the rest of the scholarship money? Amounts exceeding these limits must be included in the rent. Specifically, they will be added to the earnings of the business, just like salary.

In which personal income tax box should you check scholarships?

If the scholarship is exempt and does not exceed the established limits, you do not have to place it in any department.
If you do, it will be listed in Box 3 for cash compensation which is later added to your business income.

In what cases do I have to file a declaration?

Those who received a scholarship that did not meet the conditions described above, will have to pay taxes for that money and may have to file an income tax return.

In this case, if you only receive that grant, you may not be required to pay personal income tax as long as the amount of the grant is less than €22,000. If you also work, these amounts will change.

The income limit for people with two payers (scholarship in addition to work, for example) is reduced to 14,000 euros as long as you have received more than 1,500 euros from the second or next payer. In other words, if you receive less than 1,500 euros for the job or scholarship, the limit will go back to 22,000 euros.

It is appropriate, therefore, Make sure to submit a return request or notBecause if not, the fine that the Treasury will impose on us will be very high. Even if you are not obligated to pay taxes, it is always a good idea to ask for the reference number and See draft IRPF for income result. And he might come out to come back.

Yes in deed , If you are under 25, live with your parents and earn less than €8000, never pay rent without consulting them. The reason is that if you file the personal income tax yourself for a refund of €100, your parents will not be able to include you in their return and they will lose the possibility of reducing €2,400 in their returns. If you do the calculations, I am sure that the second option as a family will be more useful.

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