Manoeuvre 2025, new tax deductions by family quotient and income

The cut in tax expenditures from 2025 finds the percentage thresholds linked to income limits. With a correction anchored to a family quotient to reward larger households. The writing of the rules to be included in the text of the Budget Bill to be sent to Parliament points to three numbers: 8 per cent for incomes up to 50,000 euro, 6 per cent for incomes from 50,000 to 100,000 euro, 4 per cent over 100,000 euro. These are the new constraints included in the first drafts of the manoeuvre with which an operation will be sought that will in any case ensure the Treasury a saving of one billion euro under the heading of 'tax expenditure' and seek a redistribution on the lowest income brackets with respect to those that declare more to the IRS.

An attempt that, as anticipated, also brings mitigation with a view to favouring families with several children. For example, in the first income bracket up to EUR 50,000, the upper limit of deductible expenses will be EUR 4,000 in the case of a single taxpayer. But thanks to the push for large families, the maximum amount will rise in the same income bracket to EUR 8 thousand for households with three or more children. The same will also apply to higher income brackets. Added to this is the permanence of the current mechanism in force as early as 2020, which leads to the 19% deductible charges gradually decreasing from 120 thousand euro of income to zero at 240 thousand euro.

Returning to the three thresholds, however, it should be noted that all deductible expenses will enter into the calculation of the income-related ceiling. In practice, the cut-off will also affect deductible expenses for medical care and medicines. But also household expenses. This includes interest on mortgages and costs incurred for renovations. In all cases, however, the new limit will only apply to new expenses, i.e. those incurred from 2025 onwards. There will be no retroactivity on expenditure payments made in the past. So, for example, transfers for an extraordinary maintenance or renovation paid in 2024 will follow their regular course of a 50 per cent deduction spread over ten years, which will not enter into the new cap on deductible expenses based on income. This protects legitimate expectations but at the same time will force double counting for deductions.

In any case, it should be made clear that the new thresholds will determine the maximum amount of deductible expenses and not the deductions. Put another way, this means that within the expenses that will be allowed, it will be necessary to calculate the percentages for the individual allowances: for example, 19% for medical expenses or 36% for renovations on houses other than the main house. In the gymkhana of these rates, one will then obtain the deductible amount that will reduce the taxes owed or determine the refunds to be claimed via the 730 or the Income Form. This could lead the taxpayer to select on the basis of the greatest convenience the expenses to be included in the basket in order to lose as little as possible from the discounts offered by the IRS. And this could be a factor in keeping the contrast of interests alive for the most important allowances, such as those related to building interventions.