Income Tax: Federal Revenue Service will refund amounts collected on family support

After a ruling from the Brazilian Supreme Court, Income Tax is no longer levied on amounts received as spousal and child support

Taxpayers who, in the past five years (from 2018 to 2022), have filed their Income Tax (IR) return declaring amounts received as family support as taxable income may now apply to the Federal Revenue Service for a refund of the tax collected on those amounts.

The position came from the agency itself, which, on October 7, issued a clarification on the matter. The measure complies with the ruling of the Federal Supreme Court of Brazil (STF) that ruled out income tax levied on amounts arising from family law, such as alimony and child support, which have now been deemed non-taxable.

Taxes paid on amounts received as family support are now subject to refund requests. Effects are retroactive and values are adjusted at the SELIC interest rate.

Check out the Revenue Service’s instructions below:

Rectification

An amended income tax return must be filed for the year in which the undue payment or tax withholding took place. The statement can be submitted through the Income Tax Return Generator Program (“Programa Gerador da Declaração”), on the e-CAC Portal, or via the "My Income Tax" application (“Meu Imposto de Renda”).

Taxpayers who failed to include a dependent that received income from family support may do so when making the rectification, in addition to adding other expenses related to said dependent.

Rectifications are possible for income tax returns filed from 2018 (pertaining to the 2017 income tax period) up to 2022 (pertaining to 2021).

Income tax refunds

Once the amended return has been filed, if the balance of the refundable tax is greater than the amount declared in the original statement, the difference will be made available in the banking network as a residual lot.

Overpaid tax

After the rectification, if the tax payable balance is lower than the amounts originally declared, or if the rectification resulted in tax to be refunded, taxpayers can request the refund of the overpaid tax through an administrative proceeding via PER/DCOMP.

Organization

The Federal Revenue Service also warns taxpayers about the need to keep their receipts as proof of the values reported, as these documents can be requested until the limitation period of the tax credits involved has expired.

Specialized guidance

Domingues e Pinho Contadores has a department dedicated to providing services to individuals. Count on our support for tax planning, preparation and submission of tax returns to the Federal Revenue Service and carrying out administrative proceedings via PER/DCOMP. Talk to our team: dpc@dpc.com.br.