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V1283-25 10 July 2025 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Master expenses reimbursed by court order treated as wage income

A worker asks whether compensation from a court order to cover master's fees is exempt from income tax. The DGT responds that as a cash reimbursement of an expense, it constitutes wage income that is taxable.

The question raised

Taxation in Personal Income Tax (IRPF) of the compensation for master's degree expenses.

The DGT's ruling

Compensation for the costs of obtaining a specialty is a reparation for economic loss and not an exempt compensation for personal damages. As amounts are paid in cash to reimburse the expense, the income is considered monetary according to Article 42.1 of Law 35/2006. Therefore, it is classified as full employment income and not as income in kind.

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