Tax reform: Personal income tax deductions without cohabitation (cross-border guide)

Context

In brief

• The tax reform reorganizes the chapter on dependents.
• Co-habitation is no longer mandatory for IRPEF deductions.
• Reimbursement of the RSA fee for a non-cohabiting parent is exempt from IRPEF.

Key facts

• What: Tax reform on dependents.
• When: From 20 December 2025.
• Where: Italy.
• Who: Italian Revenue Agency.
• Amount: Not specified.

The tax reform has recently made significant changes to the chapter on dependents, after two years of corrections that had narrowed and then reopened the scope. The latest intervention, contained in the Omnibus amendment, has canceled the restriction that, from 2025, had excluded brothers, parents-in-law, sons-in-law, and daughters-in-law from the fiscal notion of a dependent, along with parents who do not live with the taxpayer. For deductions for children and dependents in the tax return, nothing changes, while the most immediate consequence is found in the area of corporate welfare, where the Italian Revenue Agency has just recognized the exemption for a reimbursement paid in favor of a non-cohabiting dependent. The correction applies retroactively and affects amounts that many companies have already taxed.

Changes to the TUIR

The article 1 of the Legislative Decree 7 August 2026, n. 148 rewrites paragraph 4-ter of article 12 of the TUIR. The changes apply from the tax period in progress as of 20 December 2025, therefore already for the tax year 2025. With the ruling n. 163 of 14 August 2026, the Italian Revenue Agency excludes from IRPEF the reimbursement of the RSA fee for a non-cohabiting parent. Co-habitation or non-judicial maintenance payments are relevant where the rule requires the dependent to be fiscally dependent. The deduction for family charges of ascendants continues to require co-habitation.

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Operational details

Tax reform: Personal income tax deductions without cohabitation The expenses incurred for parents, brothers, sisters, in-laws, sons-in-law and daughter-in-law are again recognised for the purposes of the tax benefits linked to Article 12 of the TUIR even when the family member lives elsewhere. Article 1 of Legislative Decree no. 148 of 7 August 2026, published in ordinary supplement no. 30 to Official Gazette no. 185 of 11 August 2026, abolishes from the first period of paragraph 4-ter the condition of cohabitation with the taxpayer or the receipt of alimony checks not resulting from measures of the judicial authority. That condition is reintroduced only in the second period, which defines the dependent family member, and moreover limited to the persons listed in Article 433 of the Civil Code other than the spouse and children. The same amendment is replicated in Article 12, paragraph 7 of the new Consolidated Law on Income Tax, Legislative Decree no. 117 of 19 June 2026, which will apply from 2027. # ## Concrete examples Imagine a taxpayer living in Lugano who incurs medical expenses for his elderly father, who lives in Bellinzona. Until 2024, the father had to live with the taxpayer or receive alimony to be considered fiscally dependent. With the new legislation, the father can be considered a dependent even if he does not live with the taxpayer, as long as he falls within the categories provided for in Article 433 of the Civil Code. # ## Importantly, the new regulations will take effect from 2027, and taxpayers need to adjust to the new guidelines to avoid tax penalties. In addition, it is advisable to consult a tax expert to obtain personalised advice and ensure that you follow the new regulations correctly. > "The tax reform introduces a significant change for Ticino taxpayers, offering new tax savings opportunities for those who incur expenses for non-cohabiting family members." - Revenue Agency In conclusion, the tax reform represents an opportunity for Ticino taxpayers to benefit from new tax breaks, as long as they are well informed and follow the new regulations correctly.

Key points

Family burdens and income limits, cohabitation rules

Cohabitation continues to count whenever the single provision requires the status of tax dependent family member, and continues to count in the deduction for family burdens, where it operates with specific rules. For example, for a border worker residing in Lugano with a dependent child, the deduction can reach up to 950 Swiss francs per year, provided that the child does not exceed 25 years of age and does not have an income of more than 12,000 Swiss francs. This income limit is critical to maintaining dependency status.

What to do for border workers

For border workers who have dependent family members, it is important to check the new provisions and ensure that they are in compliance with the IRPEF deductions. It is advisable to consult an accountant or tax expert for personalised assistance. In addition, you can use the calcolatore fiscale to estimate the deductions and refunds to which you are entitled.

Operational checklist for cross-border commuters

1. Verification of dependency status : Make sure your family members meet the income and cohabitation criteria. 2. Consulting with an expert: Contact an accountant or tax expert for a personalized assessment. 3. Using the Tax Calculator: Estimate deductions and refunds using online tools. 4. Documentation: Keep all necessary documents up to date, such as

Source: varesenews.it