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V0617-20 31 March 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · salarios de tramitación

Processing wages and temporary disability updates are taxed in the year the judgment becomes final or payable

A worker enquired about when to declare processing wages following the annulment of her dismissal and the update to her temporary disability benefit. The DGT ruled that this income must be taxed in the tax year in which the court judgment becomes final.

The question raised

Inquiry is made regarding the taxation in Personal Income Tax (IRPF), temporal attribution, of processing wages and of the deductions made by unemployment benefits and subsidies, and of the amount received due to the update of temporary disability benefits. Filing of tax returns.

The DGT's ruling

Processing wages are considered income from employment and are attributed to the tax period in which the judgment establishing them becomes final. Updates to temporary disability benefits are also attributed to the fiscal year in which they become due, and are not treated as arrears from previous years. Regarding the refund of incompatible unemployment benefits, the tax return for the year in which they were unduly received must be rectified to exclude them.

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