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V1449-23 26 May 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Reduction for economic activities may apply if temporary disability benefits are below €4,000

A self-employed worker enquired whether receiving income from a mutual insurance company due to temporary disability would prevent her from applying the reduction under Article 32.2.1º of the Personal Income Tax Act (LIRPF). The Directorate General for Taxes (DGT) ruled that, as these are Social Security benefits for temporary disability, they do not prevent the reduction provided they do not exceed €4,000 per year.

The question raised

Whether the receipt of such income from employment will prevent the application of the aforementioned reduction.

The DGT's ruling

Social Security benefits for temporary disability are classified as income from employment pursuant to Article 17.2.a) of the LIRPF. However, the failure to meet the requirement of not receiving income from employment does not occur if these benefits do not exceed 4,000 euros per year. Therefore, if the amounts imputed by the mutual insurance company are below said limit, the reduction provided for in Article 32.2.1º of the LIRPF may be applied.

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