Anyone can find themselves in a situation where they have received a benefit they were not actually entitled to. This can result from incorrect information, changes in life circumstances, or other reasons. What should you do in such a situation? Can the tax paid on such a benefit be recovered? We answer the most important questions!

Who is entitled to a refund of unduly received benefits?

If you have returned an unduly received benefit that was previously taxed, you can account for this in your PIT tax return. The conditions are that:

• This benefit increased your taxable income (i.e., an advance tax payment was collected from it).
• The returned benefit was not deducted by the payer.

Please remember that if you only returned the net amount of the benefit, without including tax, you cannot claim this relief.

How to account for the refund in your PIT return?

You make the deduction in the tax return where you declare your income for a given year. If you returned a benefit in that year, its value (together with the tax) can be deducted from your income.

What if the sum of returned benefits exceeds your annual income? You have the right to account for the surplus over the next five tax years.

Deduction Limit

The amount you can deduct includes:

The gross value of the returned benefits (i.e., including the income tax previously collected from them).

What documents are required?

To claim this relief, you must attach the following to your tax return:

• Appendix PIT/O, which you attach to forms PIT-37, PIT-36, or PIT-28.

Additionally, you should possess proof of payment for the returned benefits. You do not need to attach them to the declaration, but they must be kept for 5 years from the end of the tax year in which you filed the return.

What are unduly received benefits?

These are benefits that were paid based on incorrect or outdated information. Examples of such benefits include:

• Pensions,
• Annuities,
• Teachers’ compensatory benefits,
• Social insurance benefits,
• Pre-retirement benefits.

If you have received an undue benefit and subsequently returned it, it is worth ensuring that you take advantage of the tax reliefs available to you. This will help you avoid unnecessary financial losses and recover the tax paid.