Those with a monthly income of $2,000 and two dependents will no longer pay income tax from July, once the tax is implemented. tax reform which is considering a new rebate scheme.

The Internal Revenue Service (IRS) itself indicates that this taxpayer, who had to pay $310 per year for this tax, should no longer have what he was charged: an average of $25 per year per month deducted from his payroll.

The tax reform has already been published in the Official Gazette

From January to June, that person will pay $155 in taxes; but with the reform, which increases deductions for personal expenses under family obligations, if you have two — either children or dependents — you will pay zero. So, starting in July, there will be no withholding, and for the $155 you paid in these six months, you must claim a refund in 2024, when this tax will be settled.

Even without the burden, a person earning $1,900 a month who had to pay $237 in income taxes in 2023 will no longer have to with the changes, according to another example made by SRI.

Previously, the deduction was 10% and 20% of personal expenses, capped at about $5,000; this equated to a rebate of between $500 and $1,000, depending on income level. Now the reduction will be 18%, but the upper limit of expenses and reduction varies depending on family obligations:

That is why those who have children will benefit the most from this reform, which came into force after the Constitutional Court gave a positive opinion on the Decree on the Organic Law for Strengthening the Family Economy.

Income tax: now the reduction will depend on how many family obligations the taxpayer has, not on salary

And these taxpayers are already paying the bills. María de los Ángeles paid $1,712 in income tax in 2022, with a reduction of $534; and the tax calculator provided by the Internal Revenue Service (SRI) shows her that with the reform she would no longer have to pay anything in 2023, because she has three family responsibilities and this allows her to reduce it to $1,927.

Discounts will be reduced for others. For example, a worker earning $3,500 with two burdens will go from an annual tax of $2,885 to $1,747 with the tax reform. Since he has $240 deducted per month, he has already paid $1,440, so he only needs $307 to cover his annual payment. Therefore, the SRI calculates that from July to December this taxpayer will have to pay only $51.

The procedure that taxpayers must follow in order to report their levies and their new personal expenses will still be defined in the decisions that the Tax Administration must make in the coming days.