“Unclaimed Tax Deductions in 2023: Can They Still Be Claimed?”

Recovering Forgotten Tax Deductions: Is It Possible?

When it comes to forgotten tax deductions, is there a chance to recover them or are they lost forever? If a taxpayer in 2022 made deductible expenses without including them in the income tax return, is there a way to recover the tax benefit, or is it too late once the deadline for the 2023 income tax return has passed?

Many might not be aware that tax deductions can be claimed within 5 years.
Even if a tax benefit is not claimed when filing the income tax return for the following year, it can be requested later by submitting an amended return, even if there is no mention of the entitled benefit in the original return.

Legal Framework and Time Limits

The Supreme Court clarifies this issue with ordinance 14889 dated May 28, 2024.
If a tax deduction is forgotten when filing the annual return, there is time until the legal deadline to recover the benefit.
While the ordinance specifically refers to deductions for building bonuses, it can be applied to all types of deductions.

The Court reminds taxpayers that they can always correct their errors by submitting an amended return before the legal deadline, without forfeiting the right to any potential refund.

It’s important to note that the opportunity to amend returns is not limited to the supplementary 730 return, which can be filed by October 25 of the year following the original 730 submission.
The possibility pertains to integrating the return within a longer timeframe stipulated by law.
This means that even those who forgot deductions in previous years still have the chance to recover the tax benefit.

Correcting Errors and Claiming Refunds

In a previous ruling, ordinance 373 of 2016, the Supreme Court emphasized the taxpayer’s right to amend errors through an amended return within the deadline for filing the subsequent tax return.
This right is not contingent upon the actual refund but solely on the timeframe specified by law for offsetting any resulting credit from the prior year’s return.

The integration of annual returns is provided for by Article 2, paragraph 8 of Legislative Decree 322 of July 22, 1998.
Taxpayers have the option to supplement their return to rectify omissions and errors by submitting an amended return by December 31 of the fifth year following the original filing.

Corrective Procedure and Forms

The appropriate form for the amended return is the “Redditi” model, by selecting the “amended return” option.
This can be submitted even after the regular deadline has passed, provided that the original return was filed on time.

To rectify errors and omissions, the box for “amended return” must be checked on the “Redditi” form.
Use code 1 to correct discrepancies related to income, tax debts, or credits.
Code 2 is used to address errors identified based on communications from the Revenue Agency.

It’s crucial to distinguish between the two codes, as code 1 is for self-identified errors, while code 2 is for corrections prompted by the Revenue Agency.
Any resulting tax credit can be offset or refunded accordingly.