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Practical manual for Income Tax 2024. Part 1

Specialty in the treatment of annuities for alimony in favor of children

Regulations: Articles Law 64 and 75 IRPFABBR

Alimony payments established in favor of the children and paid by the taxpayerthey do not reduce the general taxable base of the payer, but they are taken into account to calculate their full state and regional tax liability. IRPFABBR through the special provisions established, respectively, by Articles 64 and 75 of the Law of IRPFABBR, whose purpose is to reduce the progressivity of the tax in these cases.

For children who receive such alimony payments, these constitute exempt incomein accordance with Article 7 of the Law of IRPFABBR.

On the other hand, remember that, in the case of compensatory pensions and alimony payments in favor of persons other than children, the payer may apply the reductions to the taxable base established in Article 55 of the Law of IRPFABBR which is discussed in Chapter 13 of this Manual.

For this purpose, taxpayers who pay alimony payments to their children in the 2024 tax year by court order (or set through a court-ordered settlement agreement or one formalized before the court clerk or in a public deed before a notary) without the right to the application of the minimum per descendantsprovided for in article 58 of the Law of IRPFABBR When the amount of the annual payments is less than the general taxable base, the corresponding fees for the general taxable base (state part and regional part) will be determined according to the following procedure:

  1. The amount of the annual maintenance payments will be differentiated from the rest of the general taxable base, thus obtaining two bases for the application of the tax scales:

    • Base "A": amount of the annual food allowance.

    • Base "B": remainder of the general taxable base.

  2. The general tax rate for 2024 will be applied to each of the aforementioned bases, for the state portion, and the corresponding regional tax rate for the regional portion. As a result of this application, a quota of 1 and a quota of 2 are obtained for base "A", and a quota of 3 and a quota of 4 are obtained for base "B".

  3. The quotas obtained in the previous phase will be added together to determine the general state quota and the general regional quota. This sum is as follows:

    • General state quota (quota 5) = quota 1 + quota 3

    • General regional quota (quota 6) = quota 2 + quota 4

  4. Application of the general and regional tax scales to the part of the general taxable base corresponding to the personal and family minimum increased by 1,980 euros per year. As a result of this operation, quota 7 (general state quota) and quota 8 (regional quota) are obtained.

  5. Reduction of the quotas 5 and 6 determined in step 3 above by the amount of quotas 7 and 8, without any negative results as a result of said reduction.

    • General state quota = quota 5 − quota 7.

    • General regional quota = quota 6 − quota 8.

Clarifications

  • Who applies the special requirements in determining the full state and regional share for the payment of annual child support payments?

    The parent or parents who have custody of the children The minimum allowance for descendants may be applied for the descendants who live with them. live together, and they will not be able to apply the special provisions applicable in cases of alimony payments for children set out in articles 64 and 75 of the Law of IRPFABBR. In the event that the custody of a child is terminated upon reaching the age of majority, the above will apply as long as the parent taxpayer in question continues to live with the child.

    On the other hand, the parent who pays annual maintenance payments to children under the terms provided for in article 7. k) of the Personal Income Tax Law and who has not been assigned the custody of these, not even in a shared manner, will apply the regime provided for the annuities for food, but not the minimum for descendants. Therefore, the economic dependency that payment of these entails cannot be considered cohabitation for the purposes of applying the minimum for descendants. See in this regard the TEAC resolutions of May 29, 2023 (claims numbers 00/08646/2022/00/00 and 00/10590/2022), issued in an extraordinary appeal for unification of criteria.

    In short, the regime provided for in articles 64 and 75 of the Personal Income Tax Law is only applicable to parents who, while paying annual maintenance payments to their children by court decision, do not live with them in any way. Unlike these, parents who have sole or shared custody will have the right to have the minimum amount for descendants applied to their children.

  • Where should the annual alimony payments for children be established?

    Following the modifications introduced by Law 15/2015, of July 2, on Voluntary Jurisdiction, the regime established in articles 64 and 75 of the Law on IRPFABBR for child support annuities paid by court order, extends to those agreed in the regulatory agreement formulated by the spouses before the Judicial Secretary or in a public deed before a Notary, referred to in article 90 of the Civil Code, whether or not their inclusion is mandatory.

  • What is the date from which payments made in the form of annual child support payments have an impact on personal income tax?

    According to the provisions of article 89 of the Civil Code, “The effects of the dissolution of marriage by divorce will occur from the finality of the sentence or decree that so declares or from the manifestation of the consent of both spouses granted in a public deed in accordance with the provisions of article 87.”

    Therefore, for the purposes of applying the special regime applicable in cases of annual maintenance payments for children provided for in articles 64 and 75 of the Personal Income Tax Law, only the amounts paid for this concept since the finality of the court judgment or decree, or since the granting of a public deed declaring the divorce, must be taken into account.

  • How is the amount of child support payments to which the specialty regime applies calculated?

    For the calculation of alimony payments for children to which the special regime of articles 64 and 75 of the Law applies IRPFABBR the following will be taken into account monetary amount that has actually been paid as an annual allowance for alimony, taking into account the provisions of Article 142 of the Civil Code, which states the following:

    "Food is understood to be everything that is essential for sustenance, housing, clothing and medical care.

    Maintenance also includes the education and instruction of the person receiving support while he or she is a minor and even afterwards, when he or she has not completed his or her education for reasons not attributable to him or her.

    Food will include pregnancy and childbirth expenses, unless otherwise covered.”

    Please note that the update of the amount of the annual food allowances in accordance with the CPI will be declared in the tax period in which said update is satisfied.

Note: taxpayers who pay alimony annuities to their children as provided for in Article 7 of the Law of IRPFABBR They will apply the general tax scale separately to alimony payments from the rest of the general taxable base, but not the minimum for dependents. See in this regard the TEAC Resolutions of May 29, 2023, Claims numbers 00/08646/2022/00/00 and 00/10590/2022, both issued in an extraordinary appeal for unification of criteria.