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Practical manual for Income Tax 2021.

2. Limits and excess contributions

A. Maximum annual contributions that may entitle you to reduce the tax base

Regulations: Additional Provision Ten of the Personal Income Tax Law

The maximum annual contributions to social security systems established for the benefit of persons with disabilities, for the purposes of the provisions of article 5.3 of the consolidated text of the Law on the Regulation of Pension Plans and Funds, are:

  1. 24,250 euros per year for contributions made by participating disabled people.

  2. 10,000 euros per year for contributions made by each of the persons with whom the disabled participant is related, by the spouse or by those who are in charge of him or her under a guardianship or foster care regime. All of this is without prejudice to the contributions that these people may make to their respective pension plans.

    Additional Provision ten.2 and article 53.1.b) of the Tax Law recognize the possibility for the relative or guardian of the disabled person to make contributions to the pension plan of the disabled person compatible with the contributions they can make to their own pension plan of the general system, respecting the limits set forth in the law. However, this possibility is not mentioned in relation to the disabled person themselves, which is why contributions made by the disabled person participating in their own pension plan for disabled people are considered incompatible with the same person's contributions to social security systems established for the benefit of other disabled people with whom they have a relationship of kinship or guardianship.

  3. 24,250 euros per year , taking into account both the contributions made by the disabled person and those made by all other persons who make contributions on behalf of the same disabled participant.

B. Maximum reduction limit

The annual contributions made in 2021 and, where applicable, the excess contributions made and not reduced in the years 2016 to 2020, may be subject to a reduction in the taxable base of IRPF of the current year with the following maximum limits:

  1. 24,250 euros per year for contributions made by the participating disabled person.

  2. 10,000 euros per year for contributions made by each of those with whom the disabled person has a kinship or guardianship relationship, as well as by the spouse. All of this is without prejudice to the contributions they may make to their own pension plans.

  3. 24,250 euros per year for all reductions made by all persons who make contributions in favour of the same disabled person, including those of the disabled person themselves.

When several contributions are made in favour of the same disabled person , the reduction will be made, first of all, on the contributions made by the disabled person themselves and, only if they do not reach the limit of 24,250 euros per year , may the contributions made by other persons in their favour be subject to a reduction in their tax base, in proportion to the amount of said contributions.

See in this regard, within the " Practical case " included in this same Chapter, the case of concurrent contributions to a pension plan established in favor of a person with a disability.

Note: When the disabled person himself/herself simultaneously makes contributions to social security systems in general and to social security systems established for the benefit of disabled persons, the highest limit that exists individually for each system must be applied as a joint limit to both systems.

C. Pending excesses to be reduced from contributions made in previous years

Contributions made to social security systems established for persons with disabilities that, due to insufficient tax base, could not be reduced in the declarations corresponding to the years 2016 to 2020, may be reduced in the current year, provided that a request has been made in the respective declarations to be able to reduce the excess in the following five years.

The reduction of excesses, which will be carried out subject to the maximum reduction limits discussed in the previous section, will be carried out with priority to that corresponding to direct contributions or business contributions imputed in the fiscal year itself.

D. Excess contributions corresponding to the year that could not be reduced

Taxpayers who have made contributions in the year in favour of the same disabled person under the terms discussed above may request that the amounts contributed which, due to insufficient tax base for the year, could not be reduced, be reduced in the following five years.

For this purpose, the request must be made in the IRPF declaration for the year in which the contributions made could not be reduced due to exceeding the aforementioned limits.

Attention : the amounts corresponding to the excesses pending reduction of contributions made in the financial years 2016 to 2020 pending application at the beginning of the financial year, those applied in the declaration and the remainder pending application in future financial years, as well as the excess of contributions corresponding to the financial year 2021 not applied, the amount of which is requested to be able to be reduced in the following 5 financial years, must be recorded in Annex C.3 of the declaration in the section "Unreduced excess of contributions and contributions to social security systems established in favor of people with disabilities pending reduction in the following financial years".