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V1739-24 15 July 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Back pay for hardship allowance is attributed to the year the administrative resolution is issued

A worker enquired about the taxation of back pay for a hardship allowance granted with retroactive effect. The DGT has determined that these earnings are attributed to the tax period in which they become due, i.e., when the resolution recognising them is issued.

The question raised

Taxation in the Personal Income Tax (IRPF) of the aforementioned hardship allowance.

The DGT's ruling

The arrears of the hardship allowance are considered income from employment exigible in the tax period in which the administrative resolution granting it is issued. If part of the payment is delayed due to causes not attributable to the taxpayer, it shall likewise be imputed to the original period of exigibility. As it has a generation period exceeding two years and is imputed in a single period, the 30% reduction applies if this reduction has not been applied in the previous five periods.

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