Liquidation of PIT-40 - the annual PIT will be settled by the office, not the employer

Service-Tax

2017 was the last year in which it was possible for the employer to settle PIT. Therefore, since 2018, PIT-40 has been liquidated, and thus it is no longer possible for the employer to use the PIT settlement. The settlement of this annual tax return is then made by the tax office. In the article below, we explain how, from 2019, PIT will be settled by the tax office in connection with the liquidation of PIT-40.

Until 2017 - PIT settlement by the employer for PIT-40

Until 2017 (i.e. for settlements for 2016), it was possible for the employer to settle PIT.

The employer (who collected tax advances during the year) was required to prepare an annual settlement for the employee, if the employee submitted a PIT-12 to him by January 10 of a given year, informing him about:

  • no other income,

  • not deducting discounts,

  • settling accounts on an individual basis (without a spouse or as a single parent)

Then, by the end of February, the employer was obliged to send the prepared annual PIT-40 statement to the tax office and to the employee.

When the employer's PIT settlement (PIT-40) indicated an overpayment of tax (the advances collected during the year were higher than those resulting from the PIT-40 tax return), then the employer was required to credit the excess tax towards the advance payment for March. And if there was still an overpayment after its collection, then it had to be returned to the employee in cash.

When the PIT settlement by the employer (PIT-40) indicated underpayment of tax (the advances collected during the year were lower than those resulting from the PIT-40 tax return), then the employee's income for March was reduced by the missing part of the tax (in exceptional cases, it was possible to reduce the income for April).

Liquidation of PIT-40 in 2018 - the tax office settles PIT

The amendment to the Act on Personal Income Tax in 2018 introduced a change in, inter alia, in terms of PIT settlement by the employer, or more specifically, waived the obligation to prepare annual PIT-40 tax returns (by deleting Art. 37). From 2018 (i.e. for tax returns for 2017), the employer's PIT settlement was replaced with a PIT settlement by the tax office. For the annual tax returns for 2017, the taxpayer who wanted PIT to be settled by the tax office was required to send the PIT-WZ application to the office by April 18. From the moment of receiving the application, the office had 5 days to prepare the PIT-37 annual tax return. Then, PIT was accepted or rejected by the taxpayer. The liquidation of PIT-40 does not remove the obligation for employers to issue information on PIT-11 income, which they are still obliged to prepare.

Liquidation of PIT-40 and the entry of the Your e-PIT service in 2019

In 2019, due to the introduction of the "Your e-PIT" service, entrepreneurs do not have to submit a PIT-WZ application for the tax settlement of their PIT. This is due to the fact that since 2019 (for tax returns for 2018), KAS has completed an electronic annual tax return for the taxpayer, which will be made available to the taxpayer on February 15 on the Tax Portal. Currently, this applies to settlements on the PIT-37 or PIT-38 forms. The taxpayer will be able to modify or accept the annual tax return prepared by KAS by 30 April. If the taxpayer has not submitted the declaration on his own or has not accepted it on the Tax Portal, it will be automatically accepted on 30 April (tantamount to submitting the tax return). More about the Twój e-PIT service in the article: Twój e-PIT service, i.e. settlement of the annual tax return by the office.