Taxpayers with three or more children will receive a one percentage point reduction in the withholding rate starting in July compared to the income bracket’s maximum marginal rate, according to an order published Wednesday.
“To holders of income from dependent employment with three or more dependents falling within the tables approved by paragraphs a) and b) of paragraph 1 of Shipment No. 14043-B/2022 of December 5 [que aprovou as tabelas de retenção para o 2.º semestre deste ano]a reduction of one percentage point is applied to the maximum marginal rate corresponding to the scale to which it belongs, the part to be deducted and the additional part to be deducted per dependent person remaining unchanged”, according to the decision published today in Diário da República has been published.
As defined in the National Budget Act for 2023 (OE2023), the IRS withholding tax will be split into two phases this year: one in the first semester with withholding tables similar to the regime in force in recent years and the arrival, the new one from July withholding model that works with a logic similar to that of the annual tax assessment, thus curbing regressive situations.
The goal is to prevent an employee from ‘increasing’ the rate in the retention table because of having a higher gross salary in a given month (for example, for working overtime or night shifts or working on public holidays).
This new IRS withholding tax model “follows a marginal rate logic, which is performed by combining the application of a rate to monthly income with the withholding of a portion to be withheld, similar to what occurs in the annual settlement of the tax,” said the Ministry of Finance when the tables for 2023 were announced.
Source: DN
