Personal Tax Spain: Family Situation (Model 145)

Introduction

The form 145 is important for your income tax return, influencing monthly IRPF withholdings. Your employer uses this data, reflecting family and personal circumstances, to calculate retained taxes in your payslip accurately. Fill it out when starting a job or when changes like marriage or childbirth occur. Failure to update can lead to over- or under-withholding and penalties, so you want to ensure accuracy.Understanding your tax obligations is key, and Accompany.es offers comprehensive tax services in Spain to help you navigate these complexities.

What is the 145 model for?

It is a document that will be key in your income tax return for that year, which you will present the following year, since it will serve to calculate the IRPF withholding that will be applied in your payroll every month. Therefore, the precision with which you complete model 145 will be fundamental to receive a higher or lower salary.

Your payer, that is, the company you work for, is obliged to withhold a percentage of your income in anticipation of the taxes you will have to pay in your income tax return. In this sense, your family situation (if you have dependents or are a large family), or personal situation (for example, if you have a disability), will influence when establishing the withholding percentage.

Who should fill out form 145 and when?

It is most common for you to fill out form 145 when you start working at a company, as well as when there is a modification in the personal and family circumstances that you had previously reported. In fact, the data communication must be done before the first day of each year or the beginning of the contractual relationship with the company, reflecting your personal and family situation at that moment.

However, since many employees forget to inform the company about these changes, do not know that they must do so or do not know how to do so, many companies usually ask their employees to complete it at the end of the year, to collect any variations that may have occurred and that may lead to a change in the income tax withholding on your payroll.

If there are no variations in the family or personal circumstances, it will not be necessary to repeat the communication of data to the payer in each year.Accompany.es can also assist with payroll portal  management for businesses.

Presentation in case of data variation

If your personal and family circumstances change after the 145 model has been submitted, and these circumstances result in a lower retention rate, for example, the birth of a child, you can submit the model again. The modifications will take effect from the date of communication, provided that there are at least five days left for the preparation of the next payroll.

If there is a change in your personal or family situation that involves the application of a higher rate of withholding, you must communicate this within 10 days. The new personal income tax deduction percentage will be applied to your next paycheck, provided that there are at least five days left to prepare it.

Conversely, if there is a change in your personal or family situation that necessitates the application of a higher rate of withholding, you are legally obliged to communicate this within 10 days. The new personal income tax deduction percentage will then be applied to your next paycheck, again, provided that there are at least five days left to prepare it. Staying informed about these changes is part of demystifying legal and financial responsibilities for companies in Spain.

What happens if model 145 is not filed?

If you choose not to provide your employer with any of the information requested in Form 145, the IRPF withholding applied by your company could be higher than what actually corresponds to your situation. In such a case, when you file your income tax return (Renta Modelo 100)  for that year, if more money has been withheld than your circumstances warranted, you could recover the difference.

If you prefer not to inform your payer of any of the information requested in form 145, the IRPF withholding applied by your company could be higher than the one corresponding to you. In this case, when you file your income tax return for that year, if you have had more money withheld than you would have had due to your circumstances, you could recover the difference.

In addition, bear in mind that if you include false, incomplete or inaccurate data in form 145, or do not communicate variations in your personal or family situation that, if they had been known by the payer, would have determined a higher withholding, you are committing a tax infraction that may be sanctioned with a fine of 35% to 150% of the amounts that would have been withheld for this reason.

Remember that if there is any incorrect information in form 145, you will have to assume the consequences and not the company, whose only duty is to correctly calculate the withholding percentage according to the information you have submitted.

How do you fill in the 145 model?

Form 145 is relatively simple to fill in and consists of seven sections that will serve to clarify your personal and family situation for the company.

Section 1: identification and family situation

• This section begins with your personal data, that is, your identification with basic information such as name, surname, ID and date of birth
• Family situation: identifies up to three possibilities. You only have to check one option and it has to be the one that describes your status.
• Disability: you must check the corresponding box if you have a degree of disability greater than 33% and less than 65%, equal to or greater than 65% or if you need help from others or have reduced mobility.
• Geographical mobility: you should mark this point if, while previously unemployed, you have found a job and have had to move to your habitual residence.
• Obtaining income with a generation period of more than two years during the five previous tax periods: you must check this box if, for example, you were fired in 2017 and you agreed to receive compensation during that year and the next.

Section 2: children and other descendants

• You must fill in this section with the corresponding data if you have children or other descendants (for example, grandchildren), under 25 years of age or disabled people of any age, who live with you and do not have an income of more than 8,000 euros per year.
• If the descendants live only with you and there is no shared custody, i.e. in the case of single-parent families, you must check the box “Count all children or descendants”.

Section 3: ascendants

This point is reserved for ascendants (parents and grandparents), over 65 years old, who are in your care and who do not have an annual income of more than 8,000 euros. You must also include here any disabled relatives in the ascending line who live with you, even if they are under 65.

Section 4: pensions and annuities for maintenance

In case you have to pay alimony to your children or compensation to your spouse, you must indicate this in this section, provided that these are fixed by court decision.

Section 5: deduction for third-party financing for the habitual residence

This section of Model 145 should be marked if you make any payments towards the purchase or rehabilitation of your habitual home using third-party financing, such as a mortgage. However, you will only need to fill this in if you purchased the house before 2013 and if your income does not exceed 33,007.2 euros annually. This can sometimes relate to real estate in Spain tax implications.

Sections 6 and 7: signature, date and acknowledgement of receipt

The last two sections simply refer to the inclusion of the signature by the company and the worker. In this case, an acknowledgement of receipt is added, because the obligation to retain corresponds to the company and it is important to reflect that you have given them form 145, so that they do so according to the information on it.

Where do I have to file the 145 form?

Form 145 is not filed directly with the Tax Agency. Instead, it is completed and handed over to your company or the paying entity. The company will retain a copy of the form to make it available to the Tax Authorities if requested during an audit or review.