The Income 25-26 campaign will begin next April 8 and will extend until June 30 and almost 24 million taxpayers and families will have to report to the Tax Agency. As every year, the objective is to ensure that, once the declaration is submitted, it is returned, that is, that the Treasury is the one that has to pay us money or, in the case of paying, it is the smallest amount possible, something that can be achieved by correctly applying all the deductions.
For this reason, tax experts recommend reviewing regional and state deductions, especially those designed to compensate for insularity and educational costs. They are not applied automatically in the web draft, but they can mean a relief of almost 2,000 euros for parents who finance their children’s careers away from home.
In the case of communities such as the Balearic Islands, the Treasury has a deduction of up to 1,800 euros for each son or daughter who is financially dependent and pursues higher education outside of their island of habitual residence.
How much can you deduct for your child’s studies outside the island?
As the Tax Agency website explains, it is possible to deduct a fixed amount of 1,800 euros for each child who studies abroad, as long as they complete a complete cycle. Taxpayers who reside in these regions can apply this direct deduction on the full regional quota. Unlike other aid that is a percentage of the expense, here it is a fixed amount of 1,800 euros per descendant, that is, for each son or daughter.
This measure seeks to compensate for the extra cost involved in moving, renting and living on another island or on the peninsula to pursue university studies, higher artistic education or higher professional training. It is one of the highest deductions for educational reasons in the current tax system.
Economic requirements and income limits
To access this deduction, it is necessary that the tax base does not exceed 33,000 euros if it is individual or 52,800 euros if done jointly to access the aid. Thus, in order to benefit from this tax deduction, it is necessary that the family unit’s income remains within certain limits. The sum of the general tax base (that is, the sum of income from work, real estate capital, economic activities and certain capital gains not derived from transfers, less deductible expenses) and savings cannot exceed these amounts to guarantee that the aid reaches medium and low incomes.
Furthermore, it is necessary that the student (the son/daughter) does not have significant income of his/her own. To be more exact, the rule says that the descendant who generates the right to the deduction cannot have obtained income greater than 8,000 euros during the year. These limits can be better understood in the following table.
| Mode | Tax base limit |
|---|---|
| Individual taxation | €33,000 |
| Joint taxation | €52,800 |
| Student income (child) | Max. €8,000 |
To take into account
One of the points where most taxpayers doubt is the academic justification. To apply the deduction, it is mandatory that the studies completed cover a complete academic year or a minimum of 30 credits. It is not valid for sporadic or short-term courses.
Likewise, there is a key requirement to take into account and that is that the deduction is generally applied when there is no public educational offer on the island of residence (other than virtual or distance) to carry out the corresponding studies, which requires the physical transfer of the student to another place. It is necessary to keep the registration and proof of payment of the rent or residence to prove the trip in case of a possible verification by the Treasury.