See how the INSS retiree declares precatory in the Income Tax

Retirees and other INSS (National Social Security Institute) policyholders who received precatories and other late amounts related to social security benefits in 2021 must inform the amount in the 2022 Income Tax declaration, if they are required to declare the IR this year.

The rule applies to those who received arrears in court, after suing the institute and winning the case, or who gained amounts accumulated in the INSS itself after requesting retirement and waiting months — or even years — to receive the benefit. In court, the insured can receive by precatory, when the value is above 60 minimum wages, or RPV (Small Value Requisition), of up to 60 wages (R$ 72,720 this year).

Arrears received on an accumulated basis must be declared in a specific form, called Accrued Earned Income. According to David Soares, expert consultant on Income Tax at the IOB, these values ​​are included in the accumulated income form because, in general, they refer to other years, prior to the calendar year of the declaration being made.

This year, the Federal Revenue added information to the accrued income form, such as the possibility of informing the interest value of the lawsuit (see the 2022 IR news). In addition, since 2021, taxpayers have had a specific field in which they can declare the exempt portion of the income received, if they are over 65 years of age.

There is also the right to deduct the attorney’s fee. The retiree must first deduct the part that was paid to the professional and declare only the result on the accrued income sheet. According to Soares, legal fees are included in the “Payments Made” form, under the code “60 – Lawyers (fees related to lawsuits, except labor)”.

How to declare INSS arrears:

In the Cumulatively Received Income form, the taxpayer must go to “New” and inform:

1 – Taxation chosen, if “Exclusive at source” or “Annual adjustment”

• Soares, from IOB, states that the taxpayer must simulate which of the two situations is better and choose the most advantageous one, that is, the one that guarantees a higher refund or a lower tax to be paid.
• It is possible to change the option chosen, but this can only be done until the 31st of May, the deadline for submitting the income tax return.
• In the Exclusive at Source option, taxation is done separately, regardless of the other values ​​of the declaration. In this option, there is the field “number of months”, which must be detailed in the report provided by the paying source. With this, it is possible to reduce the amount to be paid. An example would be an action referring to values ​​from the last years, which would be diluted in 65 months (counting the 13th)
• The option for the Annual Adjustment implies that the income received cumulatively will no longer be taxed exclusively at source and will be added to the other income in the declaration

2 – Name and CNPJ of the paying source

• When the amounts are received directly at the INSS, in the account in which the insured earns the monthly benefit, the paying source is the General Social Security Scheme Fund, whose CNPJ It’s 16,727,230/001-97
• For those who received precatories or RPVs from the Federal Court, there are two sources of payment, which can be the Federal Savings Bank, whose CNPJ is 00.360.305/0001-04, or the Bank of Brazilwhose CNPJ is 00,000,000/0001-91

3 – Taxable income and exempt portion for those over 65 years old

• Anyone over 65 years of age and receiving precatories is entitled to an extra exemption from the IR from the month of their 65th birthday.
• In this case, you must inform the exempt portion of the total received and subtract this amount from the amount paid
• Under “Taxable income”, on the arrears form, declare the amount left after subtracting the exempt portion

4 – Total income and amount received referring to interest

• This year, it is also possible to inform how much interest was paid on the total amount due

5 – Official social security contribution

• The payment of the contribution to the INSS only exists if the insured person who received the accumulated amount had processed the body to obtain the maternity salary
• The other benefits paid by the agency do not have a social security contribution discount.
• In general, this field is intended for workers who sue the former employer and receive the salaries or salary differences on an accumulated basis.

6 – Alimony

• If part of the amounts paid are intended for alimony, this field must be filled in.

7 – Tax withheld at source

• This field is important if the insured has had any amount of Income Tax deducted from the payment

8 – Month of receipt and number of months

• In the first field, the insured must declare the exact month in which he received the money
• In the second field, the number of months to which the total amount paid refers must be filled in; depending on this number, there is no IR charge on the accumulated money
• The correct information must be in the INSS income report or provided by the lawyer

Insured needs the income report to avoid making mistakes

The income report must be provided by the paying source. Anyone who received it directly from the INSS must enter the My INSS app or website to download the document.

Those who received from the Federal Court with payment made by Caixa or Banco do Brasil should ask the bank or their lawyer for the report. In the case of those who hired a lawyer, this professional is responsible for providing the report with all the data.

For arrears received in the base year

Those who applied for retirement in 2021, waited a few months to receive the benefit and received the amount in an accumulated form, but still last year, must inform the amount received in another form. In this case, the amounts go in “Taxable Income Received from PJ”, and not in “Accumulated Income Received”.

Soares also states that, for retired taxpayers aged 65 and over, there is the right to exempt amounts up to the limit of BRL 24,751.74 in the year (BRL 22,847.76 plus BRL 1,903.98 related to the 13th salary ). This amount goes in the “Exempt and Non-Taxable Income” form, in line “10 – Installment exempt from retirement, remunerated reserve, retirement and pension for a declarant aged 65 or over”.