New deduction for child will benefit more poor families – Daily News – Lisbon

IRS withholding tables should be changed to accommodate the lump-sum allowance of 550 euros per child

s families will be able to shoot down 550 euros per child to your IRS. This new deduction for dependents will be included in the state budget and want to replace the current family quotient, the PS has always disputed by understanding that most benefited people of higher incomes. The measure could lead to an adjustment in the retention tables at the source, so that those who earn less descontem a lower value.

This new deduction for dependents (up to 25 years, which does not work) will add is directed to the already existing and that is 325 euros. In addition, as confirmed by the DN / Mad Money, the government will keep the bonuses system that currently prevails and that notably includes children under the age of 3 years -. And that is 450 euros

family quotient was a hallmark of IRS reform, but has always been contested by the PS that at the time, proposed the most PSD / CDS-PP that swapped a fixed deduction per dependent. Although both solutions benefit a million households with dependent children, they operate differently and end up having a different effect on the amount of tax that every household has to pay. So while the family quotient influences the calculation of the tax base income (about which affect IRS rates), the fixed deduction comes into play when the tax is already determined, functioning as the remaining deductions to the collection (education and health).

in the family quotient all household members have to calculate the tax base income being assigned a value of 0.3 to each dependent. So, instead of dividing the income only by the couple’s members, went on to add to this division 0.3 for each child in the calculation of tax. At the same time, it was determined that this change, per couple, could not result in a savings of more than 600 euros per child; 1250 EUR if two children or 2 thousand euro if three or more. For single parents, the figure was halved.

The PS has always considered the regression model, since families with lower incomes could never maximize savings limit allowed. It also argued the Socialists, the measure hurt single parents

The system is coming – and it will have practical application only in the IRS that is delivered in 2017 – each child is worth 550 euros, plus other deductions that already existed. This measure, assured the DN / Mad Money the same source, will have a neutral effect on IRS revenue. “The family quotient withdrew 250 million euros to the IRS income. What we did was take that amount and divide it by the families with dependents, taking into account the number of children who actually have and not your income,” he said.

When the IRS reform was presented, the previous government estimated that the family quotient would cost about 150 million euros. It was based on that value that the PS advanced at the time, with the assignment to each dependent of a lump-sum allowance of 500 euros. But the survey carried out by the new team of Finance revealed that, after all, that change in the IRS around EUR 250 million. It is this difference which justifies the deduction has been recalibrated and increased by 50 euros.

The same source admits that, before the new model, it is necessary to slightly change the retention tables in source because those being used were designed to accommodate the family quotient.

in Portugal there are about 500 000 households with a dependent and close to 322,000 with two children. With three or more dependents are only 45,000.