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Practical Income Manual 2023.

Case b) Collection of unemployment benefit from December 2022 and maternity benefit from January 21 to February 3

Ms. MDO, who was receiving unemployment benefit since December 1, 2022, requested maternity benefit before the birth of her twins, the amount of which she received from January 24 to May 15 (once the 16-week duration had ended). of the benefit), and then the collection of the pending unemployment benefit is resumed. Please note that the taxpayer was working from 2020 until November 30, 2022 for a multinational.

Solution:

1. Maternity deduction amount

Deduction corresponding to each of the twins:

  • Number of months of compliance with the requirements: 12 months

  • Deduction amount: (12 months x 100 euros) = 1,200

  • Deduction limit per child (1,200 euros).

  • Total amount of the deduction corresponding to twins = 1,200 x 2 children = 2,400 euros

Note:  As of January 1, 2023, women who are entitled to apply the minimum for descendants can apply the maternity deduction for each child until the child reaches three years of age, when at the time of the child's birth they receive contributory or assistance benefits from the unemployment protection system.

In this case, the taxpayer at the time of birth had the right to receive unemployment benefit, without prejudice to the fact that its collection had been suspended because it was replaced by birth and child care benefit (maternity benefit). While this situation lasts (perception of the birth and child care benefit), no days of unemployment benefit are consumed; The collection of the same is suspended and resumes once it ends for the time remaining before its suspension.

Therefore, the number of months eligible for each child is 12 (January to December) since at the time of birth (January) the mother was collecting unemployment benefits, so she met the requirements, and will be entitled to the deduction until the children reach the age of 3 years.

Deduction corresponding to the oldest child:

  • Number of months of compliance with the requirements: 8 months

  • Deduction amount (8 months x 100 euros) = 800

  • Deduction limit per child (1,200 euros)

Note: Ms. MDO will be entitled to the maternity deduction in 2023 from the month of January included because at the time of the birth of her eldest child (fiscal year 2020) she was working as an employee, registered with Social Security and with contributions, so generated the right to the maternity deduction, and maintains it until the child turns 3 years old (therefore, until August included). The same would happen if he had been registered with the RETA at the time of the birth of the eldest child.

Total amount of maternity deduction 2023: (2,400 + 800) = 3,200

2. Additional increase for custody expenses

Additional increase corresponding to the eldest child:

  • Number of months of compliance with the requirements: 6 months

  • Amount of the increase (1,000 euros ÷ 12 months x 6 months) = 500

    Note: In the present case, the additional increase for custody costs for a child under three years of age in authorized daycare centers or early childhood education centers can reach up to 1,000 euros per year and will be calculated proportionally to the number of months in which the required requirements are simultaneously met. in article 81.1 and 2 of the Personal Income Tax Law . The months to be taken into consideration are exclusively those in which the expenses paid are made for a full month. Therefore, to the extent that you are entitled to the maternity deduction from the month of January, and the increase for daycare expenses can only be extended until the month prior to the start of the second cycle of early childhood education (September), computing the months complete, only 6 full months are taken into account (from January to June), so the calculation will be 1000 euros ÷ 12 months x 6 months) = 500 euros.

  • Increase limit: 500 euros.

  • The increase of 500 euros does not exceed the limit of the total amount of the non-subsidized effective expenditure of custody expenses: 2,290 euros.

    Note: in accordance with article 81 of the Personal Income Tax Law and article 60 of the Personal Income Tax Regulations , the total non-subsidized expenditure corresponding to the total amounts annual payments (for complete or incomplete months) paid to daycare centers or early childhood education centers authorized by the pre-registration and enrollment of said minors, attendance, in general and extended hours, and food, will be reduced by the amounts of said expenses that have been paid by the companies employing the beneficiaries that were considered income from work in kind exempt by application of the provisions of letters b) or d) of section 3 of article 42 of the Personal Income Tax Law .

    Therefore, in this case the custody expenses will be: 300 (tuition) + 3,000 (6 full months) + 250 (incomplete month of July) – 700 (subsidized amount) – 560 (80 x 7 months, corresponding to exempt remuneration in kind) = 2,290 euros.

Note:Even if it has been paid by both parents at 50%, both the amount paid by the mother or the taxpayer entitled to the aforementioned increase and the amount paid by the other parent will be considered.

3. Tax return result

Differential quota : 1,500

Deduction for maternity

  • Deduction amount (2,400 + 800) = 3,200

  • Increase for daycare expenses (500) = 500

Statement result (1,500 – 3,200 − 500): −2,200