What is included in the wife’s income for the wife reduction for 2021?

Basic conditions for applying the discount

As part of the tax declaration for 2021, certain taxpayers may also benefit from a tax reduction on the spouse living with the taxpayer in a jointly managed household.

The reduction for a spouse for the tax period 2021 is CZK 24,840 per year. If the spouse has a ZTP/P card, the discount is doubled. If the marriage took place during the year, the reduction is 1/12 of the amount of CZK 24,840 for each month in which the applicant was a bride (husband) on the 1st day. The reduction can only be applied annually, based on an annual tax return or settlement. The discount does not apply monthly.

A jointly managed household is defined in the provisions of article 21e of the income tax law. It doesn’t have to be the same permanent address, but co-management is key. A partner is also considered a spouse under the law governing a registered partnership (not a spouse). Another important condition for the application of the reduction to the spouse is his own incomewhich cannot exceed 68,000 crowns for the tax period.

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What matters in a woman’s income

Income included in income of spouse or registered partner (random list):

  • all of the employer’s “gross” income,
  • business income, rental income, etc.,
  • tax-exempt income, for example from the sale of real estate, cars, securities,
  • all types of retreats,
  • sick days,
  • salary compensation in the event of incapacity for work,
  • nursing care for employees (short term, crisis, long term),
  • Unemployment benefits,
  • financial assistance for maternity,
  • the remuneration of the foster parent,
  • compensation bonus,
  • nursing homes for the self-employed,
  • other grant programs related to COVID-19.

What does not count in the income of the wife

Income that is not included in the spouse’s or registered partner’s own income (this is a complete list):

  • state social assistance benefits (e.g. parental allowance, child allowance or housing allowance)
  • reception allowances, with the exception of the remuneration of the foster parent,
  • services for the disabled,
  • services in case of material need,
  • care allowance, social services,
  • State contributions to supplementary pension insurance with state contribution,
  • State contributions to supplementary retirement savings,
  • state contributions in accordance with the Housing Savings Act,
  • scholarship granted to students preparing themselves permanently for future professions,
  • income from caring for a close relative or other person who is entitled to care allowance under the Social Services Act, which is exempt from tax,
  • in the case of spouses who have property in the joint property of the spouses, the spouse’s own income does not include income which accrues to the other spouse or which is considered to be income of the other spouse for the purposes of income tax.

Income inclusion period

For income included in the ceiling, it is essential to determine which income is included in the ceiling during a given tax period. The problems and ambiguities are mainly caused by the income paid out at the end of the year. The Supreme Administrative Court (CAS) has also had to take up this issue on several occasions. More recently, a few weeks ago, in judgment 3 Afs 184/2020-37, previous case law has confirmed that the decisive factor in determining the total income of a wife during the tax period concerned is precisely when actual receipt of money or other income. and, conversely, it does not matter when the right to such performance arose.

In this case, it was a dispute in which the taxpayer requested a reduction for his wife for the 2013 tax period, but the tax office did not recognize it, stating that his wife had an income over 68,000 crowns. According to the office, unemployment benefit to which the wife was entitled in December 2012 but did not receive actual money until January 2013 counts towards the ceiling for 2013. The taxpayer disagreed and claimed that she belonged to the 2012 tax period. However, the court sided with the tax authority and said that the plaintiff’s wife’s income for a given tax period included the income actually paid to them during that period, regardless of when any legal action was brought against them.

In practice, this means that, for example, maternity, sickness, unemployment, breastfeeding benefits, but also the compensatory bonus paid in January 2022 will only be included in the wife’s own income over the tax period. of 2022. And, of course, it’s the other way around: the income of the wife for 2021 counts the income actually received at the beginning of 2021, even if the right belongs to 2020.

However, there is one exception to the above, and that is employment income. Income from dependent activities taxed pursuant to article 6 of the law relating to income tax is governed by article 5, paragraph 4, which states: Income from dependent activity and functional advantages (article 6 ) paid to the taxpayer or received by the taxpayer no later than 31 days after the end of the tax period for which they were reached are considered as income paid or received during that tax period. Income from dependent activities (i.e. income from work, board remuneration, remuneration for the exercise of the function of legal persons, etc.) settled in December 2021 and paid before January 31 2022 are included in the wife’s own income until the tax period of 2021.

What are the conditions of the discount for women?

You can apply for a reduction for your wife if your wife did not earn more than CZK 68,000 for the year.

What can be proven for the application of the reduction for the wife?

The right to a reduction on the wife is proven by a declaration on honor of the wife, which is attached to the tax return with a copy of the identity document of the wife.

What to prove to ask for a discount on the woman

If you wish to benefit from a reduction for your spouse, you must attach to the tax return:

  • spouse’s affidavit that he/she did not have an income above 68,000 crowns, as well as spouse’s identification data
  • a copy of the spouse’s identity card

For ZTP/P owners, a copy of the ZTP/P card must also be attached.

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