Income tax refund on maternity and paternity leave ready for payment

The government has just launched the second phase of tax rebates for parents on leave after a recent court ruling found that they should not have been paying.

During the first phase, in December, income tax on paternity and maternity leave taken in 2014 and 2015 was refunded.

This time around, the State is expected to have to shell out around €1.2 billion, and the second round of refunds is expected to leave about a million mums and dads better off.

Those who qualify follow exactly the same process as recipients of the December rebates, on the tax office’s website, agenciatributaria.es, or they can place the matter in the hands of an accountant if they prefer, although a fee will be involved.

The only data needed on the website is the year in which the parental leave took place, and a bank account number.

No further documentation or proof of receipt of maternity or paternity pay is necessary – the tax office will apply for all the paperwork it needs from the Social Security office.

The online systems applicants can use include the RENO programme or the Clave PIN for those who do not have a digital signature – both of which are used by members of the public for making annual tax returns where they do not use a financial advisor.

Otherwise, postal or in-person applications for a rebate can be made using hard copies of the forms and, once again, only the year of leave and a bank account number are necessary.

Applications will take a matter of days to process, meaning the cash could come through before the end of the month.

Parents who took maternity or paternity leave in 2018 and paid income tax they should not have been charged do not have to take any action to reclaim their funds, since these will be taken into account in their annual declarations due in the spring.

A Royal Decree, or Bill of Law approved on December 28 means even those on leave who were not initially thought to be affected may be able to apply for reimbursement.

These include public-sector employees who are on a different contribution system to the main Social Security scheme and who received monthly pay during leave for the birth, adoption or fostering of a child, and also self-employed workers and those affiliated to a mutual society rather than the mainstream national insurance system.

Anyone who is unsure should contact their accountant or their company’s accounts department.

The average income tax refund for maternity leave is expected to be around €1,600, whilst for paternity leave, about €383.

In December alone, tax authorities received nearly 673,000 applications for rebates for those on maternity or paternity leave in 2014 and 2015.