Announcement of the State Administration of Taxation on the implementation of the policy of increasing the special additional deduction standard for individual income tax.
In accordance with the Circular of the State Council on Raising the Special Additional Deduction Standards for Individual Income Tax (Guo Fa [2023] No. 13, hereinafter referred to as the “Circular”), the State Administration of Taxation issued the Announcement of the State Administration of Taxation on Implementing the Policy on Raising the Special Additional Deduction Standards for Individual Income Tax. It is now interpreted as follows:
I. What are the specific provisions for raising the standards for raising the special additional deduction for infant and child care, children’s education, and support for the elderly under the age of 3 (hereinafter referred to as the “one old and one small” deduction)?
The Notice stipulates that from January 1, 2023, the special additional deduction standard for infant care for children under the age of 3 will be increased from RMB1,000 to RMB2,000 per infant per month. The special additional deduction standard for children’s education will be increased from 1,000 yuan per month to 2,000 yuan per child. The special additional deduction standard for supporting the elderly has been raised from 2,000 yuan per month to 3,000 yuan, of which the only child will be deducted 3,000 yuan per month, and the non-only child and siblings will share the deduction amount of 3,000 yuan per month, with each person not exceeding 1,500 yuan.
2. How should taxpayers who have not yet reported the “one old and one small” deduction enjoy it?
If taxpayers have not yet filled in the special additional deduction for infant care, children’s education, and support for the elderly under the age of 3 in 2023, they can enjoy it after filling in the special additional deduction information on the mobile individual income tax APP or through the employer where they work. Starting from the September tax filing period, taxpayers can be deducted by the employer in accordance with the new standard, or they can report the deduction according to the new standard when handling the 2023 annual personal income tax settlement.
3. If taxpayers have already filled in the deduction of “one old and one small”, do they need to re-submit the relevant information?
If taxpayers have already filled in the special additional deduction for infant care, children’s education, and support for the elderly under the age of 3 in 2023, they do not need to re-report, and the system will automatically calculate the individual income tax payable according to the increased special additional deduction standard. If taxpayers have adjustments to the special additional deduction amount for the agreed apportionment or designated apportionment to support the elderly, they can fill in the new apportionment amount on the mobile individual income tax app or through the withholding agent.
4. If taxpayers have previously reported the “one old and one small” deduction in accordance with the original standard, how can they enjoy the deduction according to the raised standard?
Before the issuance of the Circular, taxpayers who have already filled in the special additional deduction for infant care, children’s education and support for the elderly under the age of 3 in 2023 in accordance with the original standards, starting from September, the system will calculate the individual income tax payable according to the increased special additional deduction standard, and the overpaid tax can be automatically offset against the tax payable in the following months of the current year, and if the deduction is not exhaustive, it can continue to enjoy it when handling the 2023 comprehensive income reconciliation settlement.
5. What is the legal liability of taxpayers for falsely filing special additional deductions?
Taxpayers shall be responsible for the authenticity, accuracy and completeness of the special additional deduction information, and if the taxpayer’s circumstances change, they shall promptly provide relevant information to the employing unit or the tax authority. For those who falsely declare and enjoy special additional deductions, the tax authorities will deal with them in accordance with the relevant provisions of the Tax Collection and Administration Law of the People’s Republic of China, the Individual Income Tax Law of the People’s Republic of China and other relevant provisions.
