Income tax return for domestic workers (La Dichiarazione dei redditi colf, badanti)

Individuals file their tax return (Dichiarazione dei redditi) on the “Income – Individuals” form (modello REDDITI PF) or on the 730 form (Modello 730), depending on the type of income they have.
Employees and pensioners with employment income, pensions and certain other income can file their tax return on Form 730 (Modello 730). Spouses can file Form 730 jointly (Modello 730 in forma congiunta).
All other persons, and taxpayers who are not tax residents of Italy (non residenti fiscalmente in Italia) in the tax year and/or in the year the return is filed, file Modello REDDITI PF.
Holders of a partita Iva (VAT number), even those on the flat-rate scheme (a regime forfettario), must file a tax return every year.

Filing a tax return is also a tax obligation for all workers, Italian or foreign, employed as domestic workers (housekeepers, carers, nannies or domestic helpers).
These workers receive their wages net of contributions to INPS (the National Social Security Institute), which the employer pays quarterly, but they still have to pay taxes and public charges, which fund the public services they use. What is more, the tax return allows workers to claim IRPEF tax deductions and deductions for expenses (detrazioni e deduzioni d’imposta IRPEF per le spese), both their own and those of dependent family members, incurred during the previous year.

The tax return must be filed every year, starting from 30 April.

In 2024 you must declare your 2023 income, and domestic workers must do so by filing Form 730 by 30 September 2024, either on their own online on the website of the Agenzia delle Entrate (Italian Revenue Agency) or through tax assistance centres (Caf) and qualified professionals.
Those who are not resident in Italy in the tax year and/or in the year the return is filed can only use the “Income – Individuals” form (modello REDDITI PF).
For those who cannot file their tax return by the deadline, the last available date is 30 November, using Modello Redditi.

Who is exempt by law from filing a tax return for 2023?
The law provides that, in certain cases of exemption, the taxpayer does not have to file a tax return.
However, here is our advice: think carefully about whether to file a tax return even if you are exempt. First of all, to avoid penalties, you must be absolutely sure that you fall under one of the exemptions. Secondly, bear in mind that filing a return, even when exempt, shortens the time the tax authorities have to carry out assessments and checks (attività di accertamento). Moreover, by filing a tax return you are, in some cases, entitled to a partial refund of expenses you have incurred (for example rent, medical services and so on).
In essence, whether you qualify for an exemption from filing a tax return depends on certain variables, namely:
– the type of income received during the year;
– the economic thresholds (amount) of the income received in the year.
All domestic workers in Italy, regardless of nationality, must file a tax return if their declared income in 2023 exceeded 8,500 euros gross a year. If that income is equal to or less than 8,500 euros, the worker is exempt from filing the 2024 tax return. However, such a worker must file a tax return if they had 2 or more employment contracts and, therefore, 2 or more CUs.

How do you declare income from domestic work?

All domestic workers employed under an employment contract file in person a tax return for the income received in 2023 on Form 730 (Modello 730 senza sostituto).
PLEASE NOTE: Before filing the tax return, the domestic worker must obtain from the employer a certificate of payments (la certificazione sostitutiva dei compensi / CU), which states the wages and all other payments the employer has made. The employer must give this document to the worker at least 30 days before the deadline for filing the tax return, or when the employment ends.

OUR RECOMMENDATION: to file your tax return, go to a tax assistance centre (CAF) or a qualified intermediary, because if you make a mistake when filling in the form you may be charged fines or interest.
When the return is filed on Form 730 (Modello 730), any refund – tax paid in excess – will be paid directly into the worker’s post office or bank account (the details must be given in the tax return).

Documents needed to file the tax return (Modello 730)

• A valid identity document (passport or carta d’identità (identity card));
• Codice fiscale (tax code) – including those of your spouse and of the family members who are your tax dependants (“familiari a carico” in Italian);
• Certificazione Unica forms and other proof of income (income received from the employer, from INPS, grants and so on);
• Invoices and receipts for deductible expenses incurred (medical treatment and services, medicines, a rental contract and so on; receipts and invoices for all contributions paid to INPS in the previous year, and other expenses);
• Other documents, depending on your personal situation (for example a certificate of family composition if you have dependent family members, whether in Italy or abroad);
• The tax return for the previous year.

All bills, receipts and income statements must be for the previous year!

What happens to those who do not file a tax return?

Whether or not to declare your income is a personal matter. But bear in mind that sooner or later the tax police may uncover what you owe the state.
Failing to file a tax return has serious consequences, ranging from administrative penalties to criminal prosecution. The administrative fine ranges from 120% to 240% of the tax due. The minimum applicable tax on which the fine is calculated is 250.00 euros.
For this reason, we ADVISE EVERYONE, WHATEVER THEIR INCOME, TO FILE A TAX RETURN.

Please note that under the latest Budget Law (Legge di Bilancio), in force since 1 January 2024, a digital data exchange between the INPS archives (which hold the records of regularly employed domestic workers) and the archives of the Agenzia delle Entrate is being introduced. Thanks to this data exchange, the Agenzia delle Entrate will be able to identify those who do not pay their taxes.

Other reasons to FILE a tax return

1. To avoid double taxation in Ukraine (should a law “on the taxation of workers employed abroad”, which has been under discussion for the past few years, be passed in future);
2. To apply for benefits (INPS finds your income automatically if you have declared it);
3. To apply for a “permanent residence permit” (permesso di soggiorno UE per soggiornanti di lungo periodo);
4. To apply for citizenship (compulsory since 2021);
5. For family reunification (ricongiungimento familiare) procedures;
6. If you had more than one source of income during the year (a terminated contract, unemployment benefit (NASPI) and so on), it is then an OBLIGATION;
7. Filing a tax return allows you to deduct certain expenses from your taxable income, including:

• medical expenses: for example medical visits, medicines, medical equipment. Note that the expenses must exceed 129.11 euros a year to be deductible, and when paying you must ask for your codice fiscale to be entered on the receipt;
• education expenses: for example school and university fees;
• rent;
• sports clubs for your child aged 5 to 18

8. To qualify for the 80-euro bonus (known as the bonus Renzi) (domestic workers are also entitled to the so-called “80-euro bonus” provided for by Decree-Law 66/2014 (D.L. 66/2014), since the income earned by domestic workers is treated as employment income (ex articolo 49 del TUIR). However, this bonus is not paid directly in the payslip (busta paga), as it is for private-sector employees, because the employer of a domestic worker does not act as a withholding agent (il datore di lavoro non riveste la qualifica sostituto d’imposta); it is granted only when the tax return is filed. In other words, the amount to which the domestic worker is entitled is not paid by the employer but is paid out with the IRPEF refund after Modello 730 for 2024 has been submitted);

9. To claim tax relief (filing a tax return does not mean you will immediately have to pay extra tax. A person who files a return (Modello 730) may be entitled to a refund (tax paid in excess). This money will be paid directly into the post office or bank account of the person concerned (the one given in the tax return).

Moreover, declaring your income makes it possible to obtain tax relief, in particular for those with dependent children);

10. The tax return entitles you to the Irpef bonus (personal income tax) (for domestic workers (colf, badanti) and all employees who have no withholding agent (senza sostituti d’imposta), the balancing adjustment (conguaglio) is carried out directly by the Agenzia delle Entrate.

Refunds from Modello 730 for colf and badanti, and for employees without a withholding agent in general, usually arrive by the end of the year, so at worst you will have to wait until November or December.
If Modello 730/2024 shows that Irpef is owed, the taxpayer must pay the amount due personally.
If you filed Modello 730 through a Caf or a professional, they must give you a completed F24 form (modello F24), which you must pay within the ten days before its due date at a bank or post office or through the online service of the Agenzia delle Entrate.

11. The worker is entitled to numerous bonuses and social benefits.

What goes into Form 730?

• The income received by the domestic worker, net of social security contributions (Il compenso percepito dal lavoratore domestico (certificato in tale attestazione) al netto dei contributi previdenziali);
• income under the employment contract;
• the details of the employment contract;
• the income received in the reference year, net of the domestic worker’s share of contributions withheld by the employer (il reddito percepito nell’anno di riferimento, al netto dei contributi a carico del lavoratore domestico trattenuti dal datore di lavoro);
• the number of days the worker worked during the year (this figure can also be found in the annual income statement (CU); it is essential for correctly calculating the deductions due to the worker).

NOTE: if severance pay – TFR – (or part of it) was accrued or paid to the domestic worker during the tax year, it does not have to be declared. It must be shown only in the CU and must not be entered in the 730, since it does not form part of total income and is not subject to IRPEF or additional taxes.

Note also that if a domestic worker is paid with vouchers (so-called work vouchers – buoni lavoro), the amount received does not have to be declared, since this income is not taxable.
It is worth noting that from 2024 domestic workers can file Modello 730 senza sostituto (without a withholding agent), regardless of whether during 2024 they have a withholding agent who is to carry out the balancing adjustment (il conguaglio), as follows: by entering the letter “A” in the “730 senza sostituto” box and, in the “Dati del sostituto d’imposta che effettuerà il conguaglio” section, ticking the “Mod.730 dipendenti senza sostituto” box.
If the return shows an overpayment (un credito), the refund is paid by the Agenzia delle Entrate; if it shows an amount owed, the worker pays it personally using the F24 form (modello F24).
If you filed Modello 730 through a Caf or a professional, they must give you a completed F24 form (modello F24), which you must pay within the ten days before its due date at a bank or post office or through the online service of the Agenzia delle Entrate.
If, however, you filed Modello 730 yourself with the Agenzia delle Entrate, you will need to download the Modello F24 you owe from the website yourself (nella sezione del sito internet dedicata al 730 precompilato) and pay it (online or at a bank or post office).

Tax deductions for expenses (detrazioni spese) in Modello 730/2024

Tax deductions for expenses (detrazioni spese) are an effective way to reduce IRPEF (personal income tax) and obtain tax relief. For Modello 730 in 2024, the relief applies to expenses incurred in 2023.
Importantly, all the expenses you have incurred must have been paid using traceable payment methods (le spese sostenute devono essere tracciate attraverso sistemi di pagamento tracciabili), such as bank deposits, receipts, debit or credit card payments, or PagoPA. You must keep documentation of the expenses, such as invoices, receipts, payslips and bank statements, to show that these methods were used. (Incidentally, all these documents must be kept for 5 years, since the Agenzia delle Entrate is entitled to carry out checks and inspections during that period).

To calculate the deductible expenses in Modello 730 2024 accurately and correctly, it is important to keep all the receipts and invoices for the expenses you incurred in 2023 (for medical treatment, medicines, special medical equipment and so on, and receipts and bills for rent, educational institutions, schools and pre-schools, sports clubs and so on).
The list of expense items that can be entered in the tax return to obtain an Irpef refund is very long.
In any case, however, you must check, for each of the expenses you have incurred, what limits apply and the corresponding rules for entering them in Form 730.

Deductible expenses in Modello 730

When completing Modello 730, the taxpayer gives the CAF – or takes into account themselves – the documents proving the deductible expenses (le spese deducibili e le spese detraibili) incurred in the previous year by themselves or by the family members who are their tax dependants (familiari fiscalmente a carico). It is on these expenses that tax relief on total income is granted.
The spese detraibili in the 730 are expenses that are subtracted as a percentage (%) of gross tax (si sottraggono, in percentuale, dall’imposta lorda), unlike the spese deducibili, which are instead subtracted from total income (vengono sottratte dall’ammontare del reddito complessivo).
So, if the taxpayer has incurred both spese deducibili and spese detraibili, first of all the taxable income on which gross tax will be calculated (il reddito imponibile su cui verrà calcolata l’imposta lorda) will be lower, because the spese deducibili will be subtracted.
In the next step, the gross tax applied to taxable income (l’imposta lorda applicata al reddito imponibile) will also be reduced by subtracting a percentage of the spese detraibili (usually 19% for the main types of expenses).

The main spese detraibili in Modello 730:
(*subtracted as a % of net taxable income)

• Medical expenses (Spese mediche);
• Insurance expenses (Spese di assicurazione);
• Rent (Spese di affitto);
• Public transport expenses (Spese per il trasporto pubblico);
• Education expenses (non-university and university) – Spese di istruzione (non universitarie e universitarie);
• Expenses for children’s sports activities (Spese per attività sportive praticate dai ragazzi);
• Mortgage interest payments (Spese per gli interessi passivi dei mutui);
• Estate agent fees (Spese di intermediazione immobiliare);
• Funeral expenses (Spese funebri);
• Veterinary expenses (Spese veterinarie);
• Expenses for the purchase of furniture and household appliances (Spese per l’acquisto di arredi ed elettrodomestici (Bonus mobili)).

The main spese deducibili in Modello 730: (*subtracted from total income)

• Social security and welfare contributions (Contributi previdenziali e assistenziali);
• Contributions and premiums for supplementary and individual pension schemes (Contributi e premi per forme pensionistiche complementari e individuali);
• Periodic maintenance payments to a former spouse (Assegni periodici corrisposti all’ex coniuge);
• Social security contributions for domestic and family workers (Contributi previdenziali per gli addetti ai servizi domestici e familiari);
• Contributions and donations to religious institutions (Contributi ed erogazioni a favore di istituzioni religiose);
• Medical and specific care expenses for people with disabilities (Spese mediche e di assistenza specifica per le persone con disabilità).

So, to repeat: whether or not to declare your income is a personal matter. However, bear in mind that sooner or later the tax police may uncover what you owe the state, and that failing to file a tax return has serious consequences, ranging from administrative penalties to criminal prosecution.
That is why we recommend always filing a tax return, to protect yourself from unpleasant “surprises” later on.
If you have questions or difficulties with filing your tax return, get in touch: we can help and will be glad to answer your questions and help you work out which documents you need to gather and which income you must declare under current legislation.