Tax Exemptions for the Senior Citizen: Should Employed Senior Citizens Pay Income Taxes?

03 - 17

Since Filipino Senior Citizens are automatically granted VAT exemptions and certain discounts on their purchases, does it also follow that they should be exempted from paying income taxes as well?

We cannot deny the fact that a lot of Filipinos in their senior years are still gainfully employed and have become immensely successful at their chosen careers. And while they are entitled to the full benefits and privileges mandated by law for senior citizens, many are wondering if they should still be paying their income taxes and other government contributions like their SSS, Philhealth, and Pagibig.

The official website of the Philippine Gazette (www.gov.ph) provides a straightforward outline of who should be paying income taxes to the government.  Below is a quick summary:

You should file your income tax return if:

  1. You are a Filipino citizen living in the Philippines, receiving income from sources within or outside the Philippines, and if –
    • You are employed by two or more employers, any time during the taxable year.
    • You are self-employed, either through conduct of trade or professional practice.
    • You are deriving mixed income.  This means you have been an employee and a self-employed individual during the taxable year.
    • You derive other non-business, non-professional related income in addition to compensation income not otherwise subject to a final tax.
    • You are married, employed by a single employer, and your income has been correctly withheld – the tax due is equal to the tax withheld – but your spouse is not entitled to substituted filing.
    • You are a marginal income earner.
    • Your income tax during the past calendar year was not withheld correctly – if the tax due is not equal to the tax withheld.
  2. You are a non-resident citizen – if you are a Filipino who works or resides abroad – receiving income from sourced within the Philippines.  (You are taxable only for the income you earn from the Philippines.)
  3. You are not a Filipino citizen but you receive income from sources within the Philippines, regardless of your residency.  (You are taxable only for the income you earn from the Philippines).

You are not required to file an income tax return, if:

  • You are a minimum wage earner.
  • Your gross income (total earned for the past year) does not exceed your total personal and additional exemptions.
  • Your income derived from a single employer does not exceed P60,000 and the income tax on which has been correctly withheld.
  • Your income has been subjected to final withholding tax.
  • You are qualified for substituted filing.

Clearly, employed Senior Citizens are not included in the income tax payment exemption unless they are minimum wage earners.

In the same manner, employed senior citizens whose SSS, Philhealth, and PagIBIG contributions are still shared with their employers must still continue paying their contributions out of their salary.  These payments shall continue to form part of their retirement and pension benefits the moment they officially retire from employment.

Source: www.gov.ph

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Published by MasterCitizen

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