There will be changes in the popular PIT tax relief. Today, it allows you to save an average of PLN 2,000

Possible changes to the “Mój prąd” program this fall

According to data from the Ministry of Finance for 2022, on average one taxpayer using the thermal modernization relief wrote off over PLN 18,600 from income in this way. This translates into a tax reduction of over PLN 2,000. The Ministry of Finance is proposing minor changes that will result in even more beneficiaries.

The thermal modernization relief is, alongside subsidy programs, one of the ways to reduce the costs of replacing old heat sources. This tax relief can be included in the annual personal income tax settlement PIT.

The regulations introducing the thermal modernisation relief came into force on 1 January 2019. The supplementary legal act is the Regulation of the Minister of Investment and Development of 21 December 2018 on determining the list of types of construction materials, equipment and services related to the implementation of thermal modernisation projects.

Who can benefit from thermal modernization relief?

Thermal modernization means making changes to a building that reduce its heat demand.

The right to reduce tax liability by thermal modernization costs applies only to owners or co-owners of single-family residential houses. This also applies to terraced or semi-detached buildings.

The thermal modernisation relief does not cover buildings under construction (not yet put into use).

Thermal modernization relief – what does it include?

  • insulation of the building, including its walls, roof, foundations and balcony slabs,

  • replacing the furnace with a gas or oil condensing boiler, as well as with solid fuels (meeting specific ecological requirements),

  • purchase of construction materials included in the heating installation (including the electric heating system) or the domestic hot water heating installation,

  • connecting the house to the heating or gas network,

  • installations using renewable energy sources, such as heat pumps and photovoltaic panels

  • replacement of windows, doors, heating system and ventilation system,

Under the 2024 thermal modernization relief, you can deduct costs related to the purchase of materials and equipment needed for work. The scope also includes everything related to the dismantling of old systems and the installation of new ones, including paying employees.

How to deduct thermal modernization relief?

The thermal modernization relief can be deducted in the PIT-36, PIT-36L, PIT-37 or PIT-28 tax return, attaching the PIT/O attachment (information on deductions). It is necessary to document the incurred costs by presenting an invoice issued by an active VAT payer or including value added tax, which was issued by an entity of a European Union Member State.

You can deduct the thermal modernisation relief in your annual PIT tax return from:

  • income taxed according to the tax scale,

  • income taxed with a flat tax,

  • income subject to lump sum taxation on recorded income.

The total amount of all thermal modernization works in 2024 cannot exceed PLN 53,000.

According to data from the Ministry of Finance for 2022, on average one taxpayer wrote off over PLN 18,600 from income in this way. This translates into a tax reduction of over PLN 2,000. This is more than in the case of the very popular child tax relief.

Proposed changes

Last week, the list of legislative and programmatic works of the Council of Ministers published information on the ongoing work on the draft act amending the Personal Income Tax Act, the Corporate Income Tax Act and certain other acts.

One of the changes includes a thermal modernization relief. As we said, today, expenses incurred by the taxpayer, e.g. for building insulation, installation of a heat pump or photovoltaic panels, can be deducted from the PIT tax base. A VAT invoice is required to document the expenses.

— This turned out to be a problem when thermal modernization projects are co-financed or co-organized by a commune and the commune receives payment from the taxpayer. The point is that the commune is not always a VAT payer and cannot always issue an invoice. People could not use the thermal modernization relief if the payment was made to the commune, because they did not have an invoice. We are improving this regulation and after the change, the basis for the relief will be proof of payment to the commune — said Deputy Minister of Finance Jarosław Neneman in an interview with PAP.

A wider group of relief beneficiaries

According to Neneman, another solution that would be beneficial for taxpayers is to expand the group of non-governmental organizations that can benefit from income tax exemption.

—The change will result in the exemption of income of all non-governmental organizations — in the part intended for activities strictly defined in the OPP Act (the sphere of public tasks), excluding economic activity. As a result, the scope of the exemption will be wider than before. This is something that non-governmental organizations are very keen on, it makes things much easier, and the cost of this solution is PLN 17 million. These are small costs, but the simplification — both on the side of non-governmental organizations and on the side of the administration — is significant and thus eliminates another area of ​​conflict — explained the deputy minister.

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