How to get 13% income tax back on a mortgage loan

Buying a home with a mortgage involves significant expenses for the down payment, and then over the course of decades, the borrower is obliged to repay the debt to the bank along with interest. The return of mortgage interest will help cope with the mortgage burden by offsetting part of the costs in the form of tax amounts returned from the budget. The right to reimbursement of interest overpayment on a mortgage is fixed by tax legislation and can be used throughout the entire period of the mortgage, based on calculations of actually paid income tax.

Features of refunds from the legal point of view

The legislative norm requiring the return of funds to the taxpayer who took out a mortgage loan is fixed in the provisions of Chapter. 23 of the Tax Code of the Russian Federation and a number of separate acts explaining the process of obtaining compensation from the state.

As established by law, a citizen who purchased real estate with the help of a mortgage loan has the right to apply to the Federal Tax Service to return the money from part of the funds paid in the form of income tax (i.e., in the amount of 13% of total income for the year). Mortgage repayment is limited by 2 parameters: the amount of interest paid and the tax deducted. To compensate for the cost of interest on a loan to purchase an apartment, you will need to contact the Federal Tax Service and agree on the possibility of payment by submitting documents and declarations.

The property deduction is drawn up in accordance with the provisions of Art. 220 of the Tax Code of the Russian Federation, allowing you to receive compensation from the budget when purchasing any type of housing - a house, an apartment, regardless of the source of financing. In addition to compensation for expenses related to the transaction itself, a citizen has the right to receive compensation for interest.

The borrower will be able to use the deduction for the first time after the end of the first reporting year in which the transaction was registered.

There is no need to immediately contact the Federal Tax Service. The law allows for filings over a subsequent three-year period. Sometimes it’s easier to apply for deductions for 3 periods at once in one application. The frequency of applications is regulated by the borrower himself.

An important limitation is that buyers of real estate located within the Russian Federation can reimburse the 13 percent tax, provided they purchase housing from third parties. Transactions with relatives are considered questionable and do not allow for deductions. There are other restrictions regarding the maximum amount and category of citizens who have the right to deduct.

We calculate personal income tax

Reimbursement amounts for employee expenses related to payment of “housing” interest are not subject to personal income tax. But only in the amount in which these amounts are included in expenses that reduce the income tax base, that is, in an amount not exceeding the limit established in paragraph 24.1 of Article 255 of the Tax Code. Thus, the amount of compensation exceeding the mentioned limit is subject to personal income tax at a rate of 13 percent.

When applying the provisions of paragraph 40 of Article 217 of the Code, it should also be noted that this norm provides for the exemption from personal income tax for amounts reimbursed by an organization for expenses actually incurred by its employee. If the employee pays interest on the loan directly to the bank, this rule does not apply. After all, there is no reimbursement to the employee of the amounts of interest previously paid by him (letter of the Ministry of Finance of Russia dated December 29, 2010 No. 03-04-06/6-322).

Let's say an organization reimburses interest costs for several employees.
Then, if the maximum amount is exceeded, income subject to personal income tax must be distributed among the relevant employees. The procedure for such distribution of the organization should be fixed in the accounting policy. Example 2
Let's use the data from example 1. From the excess amount of 7,500 rubles. (30,000 – 22,500) Delta LLC must withhold personal income tax at a rate of 13 percent. For this purpose, the organization distributed the specified amount between lawyer O.G. Somov, manager E.N. Ershov and storekeeper R.P. Udochkin in proportion to the amounts of compensation they received. This is established in the accounting policy for tax purposes of Delta LLC. As a result, the taxable income of each employee for January–March 2012, in addition to the wages they received, amounted to: – for O.G. Somov – 3750 rub. (RUB 7,500 X RUB 15,000 : RUB 30,000 X 100%); – from E.N. Ershova - 2000 rubles. (RUB 7,500 X RUB 8,000 : RUB 30,000 X 100%); – from R.P. Udochkina – 1750 rub. (RUB 7,500 X RUB 7,000 : RUB 30,000 X 100%). The organization will withhold personal income tax from compensation paid to employees in the following amounts: – according to O.G. Somov – 488 rubles. (RUB 3,750 X 13%); – according to E.N. Ershov – 260 rubles. (RUB 2,000 X 13%); – according to R.P. Udochkin – 227 rubles. (RUB 1,750 X 13%).

Who is eligible for a tax refund?

To receive compensation for a mortgage loan, it is necessary for a citizen to meet the following requirements:

1. Having Russian citizenship, or staying in the country for more than 6 months with the payment of personal income tax as part of official work.
2. Availability of official employment with payment of the income tax required by law.

Persons who do not receive income and do not pay personal income tax to the budget are not entitled to receive compensation. If there is no income and no tax paid, there is nothing to return from the budget. Citizens working unofficially are also not entitled to a refund of interest. With a gray salary, the taxpayer has the right to issue a deduction only in the amount of the tax that is confirmed by the 2-NDFL certificate.

If the borrower is an individual entrepreneur, it is impossible to return personal income tax from the budget if a simplified taxation scheme is applied.

Methods for compensating mortgage interest

The procedure for interest reimbursement may vary. However, regardless of the chosen method, the benefit package for the employee will be the same.

employer compensation for interest on a mortgage loan taxed ?

Compensation is included in salary

In this case, the employer accrues a portion of the salary, which is reimbursement of interest on the mortgage.

It is important that compensation can only be part of earnings, and not the entire salary. The employee must remain at least the minimum salary.

This method is relevant in cases where the employer pays an employee a “gray” salary. That is, part of the earnings is official, and part is unofficial. The interest reimbursement method is needed to legalize part of the unofficial salary. In this case, the actual amount of payments does not change, but the employee officially begins to receive an allowance as compensation. What is the purpose of this method? The fact is that you do not need to pay contributions on compensation. It allows you to reduce taxable profit.

Question: Is compensation for mortgage interest when purchasing housing paid to an employee by an employer taken into account when calculating average earnings? Is it legal to indicate in a local act of an organization that this payment is included in the calculation of average earnings (for example, in the regulations on wages)? View answer

The case under consideration is not suitable for cases of completely “white” wages. If part of the official earnings turns into compensation, this may raise suspicions because in this situation the salary is reduced. Reducing official earnings is not prohibited by law, but such a change may raise questions from the tax authorities. Inspectors may accuse the company of artificially lowering personal income tax.

IMPORTANT! When implementing this method, the employee must send a monthly certificate to the accounting department stating that the mortgage interest has actually been paid.

Compensation is paid in the form of a quarterly/annual bonus

This method is the safest. This is due to the fact that a certificate of interest payment can be provided less frequently: once a quarter or once a year. Moreover, the employer has the right to independently decide on the calculation of the bonus and the procedure for its payment. That is, compensation can replace either the entire premium or part of it.

IMPORTANT! The bonus limit at which payments can be written off as expenses is 3% of the employee’s earnings. Therefore, the amount of compensation plus the amount of bonus should not exceed the established limit.

Although this method is safer, regulatory authorities may still have questions. They may concern the unjustified deprivation of bonuses to employees who are paid compensation for interest.

Significant features of interest reimbursement

How much mortgage interest can an employer reimburse? Let's look at the compensation rules:

• Interest can be reimbursed on a mortgage taken from any lender: bank, private company, individual entrepreneur. There are no requirements for the creditor.
• Interest can be reimbursed on a mortgage issued for real estate that is in common shared ownership. However, the employee must send documents issued specifically to him to the accounting department.
• You can pay compensation to an employee who is on long-term leave.
• Recovering interest that was paid before employment or after termination is risky. In such a situation, problems with regulatory authorities may arise.

Compensation of interest is a procedure, all the nuances of which are not regulated by regulations. The procedure for compensation is determined by the employer himself. However, he must take into account that risky schemes will provoke questions from representatives of the tax authority.

Nuances of interest reimbursement

Russian tax legislation strictly regulates the process of processing compensation for a mortgage. The Tax Code of the Russian Federation (clause 4 of Article 220) establishes a maximum limit on the amount of deduction for transactions worth up to 3 million rubles (if the housing costs more, the 13 percent refund rate is calculated based on the maximum value). Thus, according to the law, each taxpayer has the right to receive compensation of up to 390 thousand rubles for a mortgage in total for all years. However, in practice, it is not always possible to fully reimburse the amount, since returning 13% from the mortgage is possible only under the condition of a long lending period and a high salary.

If wages are low, modest amounts are paid into the budget each year, which means the compensation will be small. The greater the confirmed income and contribution to the budget, the greater the chance of reimbursing the maximum amount.

If the loan agreement was signed before 01.01. 2014, then the upper threshold of 390 thousand rubles is removed - you can compensate the entire amount within thirteen percent of contributions to the budget for the year.

Limit value calculation

As already noted, the cost of reimbursing employees for the payment of “housing” interest is recognized in a certain amount: their amount should not exceed 3 percent of the amount of labor costs.

Let us remind you that labor costs, according to paragraph 1 of Article 255 of the Tax Code, include:

• any accruals to employees in cash and in kind;
• incentives and bonuses;
• compensation accruals related to work hours or working conditions;
• bonuses and one-time incentive accruals;
• expenses associated with the maintenance of these employees, provided for by the norms of the legislation of the Russian Federation, labor contracts or collective agreements. The first thing you should pay attention to here is that when calculating the limit, they use the amount of labor costs for the organization as a whole, and not separately for each employee.

Secondly, the amount of labor costs is determined on an accrual basis from the beginning of the calendar year.

The fact is that for profit tax purposes, labor costs are recognized as an expense on a monthly basis based on the amount of expenses accrued in accordance with Article 255 of the Tax Code. Taxable profit is determined on an accrual basis from the beginning of the tax period. The tax period for corporate income tax is the calendar year (clause 4 of article 272, clause 7 of article 274, clause 1 of article 285 of the Tax Code of the Russian Federation). Similar explanations are given in letters of the Ministry of Finance of Russia dated June 11, 2009 No. 03-03-06/1/395 and dated November 17, 2008 No. 03-04-06-01/336.

Note that under the cash method, labor costs are recognized as an expense as the debt to pay wages to employees is repaid (subclause 1, clause 3, article 273 of the Tax Code of the Russian Federation).
Then, in calculating the maximum amount, the amount of wages paid should be used. Example 1
The collective agreement of Delta LLC contains a provision for the organization to reimburse employees for the payment of interest on loans and credits received by them for the purchase and construction of residential premises. The organization provides assistance in the form of such compensation to the following employees: lawyer O.G. Somov, manager E.N. Ershov and storekeeper R.P. Udochkin. For January–March 2012, the expenses of Delta LLC for compensation of these costs amounted to only 30,000 rubles, including in relation to: – O.G. Somov - 15,000 rubles; – E.N. Ershova - 8000 rubles; – R.P. Udochkin - 7000 rubles. During the same period, the amount of labor costs for the organization as a whole amounted to 750,000 rubles. This means that she has the right to reduce the income tax base in February by an amount that does not exceed 22,500 rubles. (RUB 750,000 X 3%). Consequently, Delta LLC has the right to include in labor costs only part of the costs of reimbursing employees’ expenses for paying “housing” interest: instead of 30,000 rubles. only 22,500 rub. The excess amount is RUB 7,500. (30,000 – 22,500) Delta LLC has no right to take into account labor costs.

The maximum amount of expenses for reimbursing employees’ expenses for paying “housing” interest during a calendar year may change. After all, the income tax base is determined by the cumulative total from the beginning of the tax period, and the amount of labor costs increases.

Ways to return 13% from a mortgage

At the discretion of the taxpayer, the following options are available on how to receive a refund of interest:

1. Through the Inspectorate at the place of residence.
2. By filling out a tax return form through State Services.
3. Through the employer.
4. By submitting a package of papers through the MFC.

Intending to receive compensation through an organization, a person is spared the need to wait for the expiration of the annual period - he can receive compensation immediately, with a tax refund when receiving a monthly salary. Other design options are possible after the end of the year in which the transaction took place.

How to get mortgage interest back through the tax office

You can find out which inspection you should contact to coordinate the return of interest from the information on the State Services website by writing your Taxpayer Identification Number (TIN) and place of registration.

The tax registration process in 2022 is presented in the following steps:

1. Collection of documents. Order a certificate of the amount of interest paid for the year.
2. Preparation of the 3-NDFL report.
3. Submission of the complete package to the tax authority at the place of registration.
4. Verification of documents and consideration of the legality of providing a deduction.
5. Notification of a positive decision and writing an application indicating the details for the transfer.

It takes several days to prepare the package, but it takes the tax authorities 2-3 months to review the application. It takes another 2 weeks to organize payment according to the taxpayer’s details.

Refund through employer

The process of compensation through the Federal Tax Service is lengthy - you need to wait until the end of the year and prepare all the necessary certificates. It is much easier to agree on an income tax refund for interest as wages are paid - the employer will pay the wages without deducting personal income tax.

The matching algorithm looks like this:

1. Agree on the right to receive a tax deduction at your place of residence.
2. Receive a notification from the tax authorities and submit it to the accounting department at your place of work.
3. From the next salary they stop deducting 13%, i.e. The amount of the salary transfer increases by the amount of income tax.

The monthly return authorization lasts for a period of 1 year. Next, the taxpayer needs to apply for approval again.

Through the government services website

Registered users of their personal account on the government services website have access to a simplified form for filing an income tax return remotely. Refund of interest requires the preparation of an online form 3-NDFL and the attachment of scanned documents.

Step-by-step instructions are presented below:

1. Authorization in the system, transfer of taxpayer data (passport data, TIN, registration, SNILS number).
2. After checking the accuracy of the data, the user will be able to exercise the right to submit 3-NDFL remotely.
3. You can find the required section through the Service Catalog by going to the Taxes and Finance section, accepting declarations.
4. Next, they choose to provide an electronic service to fill out the form.
5. During the filling process, the user’s personal data from the passport and from a certificate from the employer will be required.
6. To confirm the information, upload a scanned 2NDFL.
7. Select the tax deduction option that you want to apply for.

The transfer of information is confirmed by an electronic signature. Before submitting the form, you must carefully check the correctness of the information entered, since further corrections will not be possible.

A similar online service is provided for taxpayers registered in the LC on the Federal Tax Service website.

What documents are needed for return

Despite the fact that the list of papers to receive a refund of interest looks impressive, the only difficulties are filling out 3-NDFL and obtaining a certificate from the bank and from the place of work. For a person who has already gone through preparations for a mortgage transaction, it will not be difficult to agree on a personal income tax refund. The package of papers for tax authorities includes:

1. Passport.
2. TIN.
3. Bill of sale for real estate.
4. 2-NDFL, 3-NDFL.
5. Certificates from the bank confirming the amounts paid in interest during the year and the balance of the debt at the time of application.
6. Application in the prescribed form indicating enrollment details.

Additionally, documents may be required confirming the fact of payment to the seller of the amount specified in the purchase and sale agreement - receipt, receipt, etc.

When registering a mortgage for shared ownership, a marriage registration certificate is provided to the Federal Tax Service.

If the organization uses the simplified tax system

Employers using a simplified taxation system can also take into account compensation to employees for paying housing interest. This conclusion is contained in the letter of the Ministry of Finance of Russia dated April 11, 2011 No. 03-11-06/2/50.

The Ministry of Finance approves

The date employees paid interest on housing loans is not important for tax purposes. This remark was made by officials of the Russian Ministry of Finance in a letter dated April 6, 2009 No. 03-04-06-01/80.

The fact is that when determining the tax base, “simplified workers” can write off expenses for wages and temporary disability benefits in accordance with the legislation of the Russian Federation (subclause 6, clause 1, article 346.16 of the Tax Code of the Russian Federation). And labor costs for the purpose of determining the base for the “simplified” tax are written off in the manner established by Article 255 of the Tax Code.

Please note: only those employers who pay tax at a rate of 15 percent can write off such expenses. For those who preferred the “profitable” simplified tax system, such a maneuver is not allowed. This means that the personal income tax taxation procedure is in question.

In a letter dated October 7, 2010 No. 03-04-06/6-246, the Russian Ministry of Finance actually said that when applying the 6% simplified tax system, employee income will have to be taxed in the generally established manner. The preferential provisions of paragraph 40 of Article 217 of the Tax Code do not apply in this case. These amounts are subject to personal income tax in accordance with the established procedure.

How to calculate your tax refund

To calculate what the budget reimbursement will be, you don’t need any special mathematical knowledge. The calculation is based on 2 main restrictions:

1. For the year they return an amount of 13% of the tax declared to the Federal Tax Service.
2. The total amount of compensation does not exceed 13% of the cost of housing or 3 million rubles, i.e. no more than 390 thousand rubles.

When filing a return from year to year, the amount of interest will decrease as the debt is paid off, and with it, the amount of deduction available to the borrower will also decrease.

Accounting

In accounting, employers' expenses to help employees repay housing loans are recognized in full. They are reflected as expenses for ordinary activities (clause 7 of PBU 10/99 “Expenses of the organization”, approved by order of the Ministry of Finance of Russia dated May 6, 1999 No. 33n).

The amount of compensation is recorded in the debit of cost accounting accounts (20, 25, 26, 29 or 44) and the credit of account 73 “Settlements with personnel for other operations” subaccount “Calculations for reimbursement of interest costs” in the reporting period in which it was accrued (Clause 18 PBU 10/99).

V.A. Lyalin, tax consultant

How many times can you use a refund?

The law does not limit a person in terms of the frequency of applications to the Federal Tax Service. If the mortgage was issued for a small amount and the amount of 390 thousand rubles was not used in full, the borrower retains the right to receive a tax deduction for interest on other mortgage loans.

There are no restrictions on how many years you can receive payments from the budget. However, a general limitation period of 3 years from the date the right arose applies. If 4 years have passed since the transaction and the taxpayer has applied to the Federal Tax Service, he will be able to return the mortgage tax for the last three years. The right to repayment of interest is valid for the entire repayment period of the mortgage loan with a frequency of once a year.

If compensation is organized through the employer, payments are received throughout the entire period agreed with the Federal Tax Service while working for a specific employer.

Registration of a tax deduction for % is a way to reduce the amount of debt to the bank and make monthly payments smaller, however, the legislation does not limit the borrower’s right to dispose of the amount received at his own discretion. You may need it to renovate your apartment or make another expensive purchase.