The return to school is approaching, and with inflation any method that serves to save or generate extra income is welcome.
If you are a natural person in the schemes for salaries, fees, lease or business activity, you can deduct two expenses for educational services: tuition and school transportation.
Individuals who are in the Simplified Trust Regime (Resico) cannot make personal deductions, which include school expenses; nor authorized, due to the reduction they have in the collection of ISR, compared to people who are in the general regime.
Tuition deductions are limited to an annual amount according to the educational level and are applicable per student.
Individuals may deduct payments for education services at the levels from basic to high school education that they make for themselves, for their spouse or the person with whom they live in concubinage, and for their parents or children, provided that said persons do not receive income equal to or greater than an annual UMA, in accordance with article 1.8. of the presidential decree of December 26, 2013 that grants different tax benefits.
The amounts, in accordance with article 1.10, are the same since fiscal year 2014, so they have not been updated with inflation.
-Preschool: 14,200 pesos
-Primary: 12,900 pesos
-Secondary 19,900 pesos
-Technical professional 17,100 pesos
-Baccalaureate or its equivalent: 24,500 pesos.
The deductions do not apply to expenses for professional or university level.
If in the same fiscal year, a person completed two educational levels, for example, went from primary to secondary, the amount that applies to be deducted is the higher one, which in this case is secondary. The deductions do not apply to expenses for registrations or re-registrations, details the 2013 decree.
To make this deduction valid, educational institutions must separate the corresponding amount for the student’s education in the digital tax receipt.
Expenses for school transportation are tax deductible as long as they are applied only to descendants in a straight line (children), it is mandatory in the area of residence of the school or when this expense is included in the tuition for all students, details the ISR Law in article 151, section VII.
For these purposes, the corresponding amount for school transportation must be separated in the receipt issued by the educational institution.
How to deduct school expenses?
Expenses for school fees and school transportation are presented in the annual income tax return, with the receipts that are issued, and mostly registered in the Tax Administration Service (SAT) system at the time of payment, so they may appear in the return. preloaded, if you can’t load them manually with your digital receipts at hand.
For the deductions to apply, you must take several considerations:
Limits . By adhering to a specific amount per school grade, the expense for tuition is excluded from the global limit of personal deductions.
The global limit is equal to 15% of the taxpayer’s gross income or five annual UMAS (whichever is less), according to the 2022 Treasury Waiver report. The expense for school transportation does fall within this limit, and others such as medical services, psychology or nutrition, refers to article 151 of the ISR Law.
Way to pay. It is very important that payments for both items be made by check in the taxpayer’s name, electronic fund transfers, from accounts opened in the name of the taxpayer, or by credit, debit, or service card.
Authorization. Authorized payments are those made to private educational institutions that have authorization or recognition of the official validity of studies under the terms of the General Education Law.