2026 tax credit: calculation for the single cross-border commuter

Context

TL;DR

• Agreement signed on 23 December 2020
• Effective January 1, 2024
• Old frontier workers: exemption of €7,500
• New frontier workers: deductible of €10,000

Key facts

• Agreement: December 23, 2020
• Entry into force: 1 January 2024
• Italian ratification: Law 83 of 13 June 2023
• Old cross-border commuters: already such before 17 July 2023
• Transitional regime: 2024–2033
• New cross-border commuters: €10,000 deductible
• 730: panel G, section III
• IRPEF 2026: 23% up to €28,000; 33% €28'001–€50'000; 43% more

The New Cross-border Workers Agreement was signed on 23 December 2020, which came into force on 1 January 2024. The Italian ratification is Law 83 of 13 June 2023. For cross-border workers who live in Italy and work in the Canton of Ticino, the sequence of dates is the starting point of the 2026 calculation. Anyone looking for the new 2026 tax agreement must therefore start from the correct date: the agreement does not come into force in 2026, but from 1 January 2024.

The first check concerns the category. An old cross-border worker is someone who was already such before 17 July 2023. The exemption of €7,500 and the transitional regime 2024–2033 apply to this category. For new cross-border commuters the deductible is €10,000. In the focus on a single cross-border worker, this is the first separation to report before moving on to the declaration data. The transitional regime and the 2026 rates are two different pieces of information and must be noted separately.

The rules to read together

Withholding tax on cross-border workers' income is withheld only in Switzerland, not in both countries. Italy avoids double taxation through tax credit. In 730, the credit for foreign taxes must be indicated in table G, section III; the CE framework belongs to the PF Income Model and should not be treated as a 730 framework.

From 2026 the Italian IRPEF is 23% up to €28,000, 33% between €28,001 and €50,000 and 43% over €50,000, according to Law 199/2025, art. 1, paragraph 3. For incomes 2024–2025 the reported rates are 23%, 35% and 43%. The comparison avoids applying the previous intermediate range to 2026.

The Double Taxation Convention between Italy and Switzerland was signed on 9 March 1976. Switzerland is not part of the EU or the EEA. Tax rates, including withholding tax, derive from federal and cantonal laws: at federal level they are administered by the AFC/ESTV, while in the cantons they are the responsibility of the respective tax administrations.

Operational details

The first line of the checklist for a single border worker is the date of July 17, 2023, not the final balance of the paycheck. The date is used to choose between the old and new regime; the year 2026 is instead used to read the indicated personal income tax rates. Keeping the two steps separate reduces the risk of using the wrong excess.

Two hypothetical scenarios

A border crossing already in place before 17 July 2023 falls under the old border crossing scenario: the exemption is €7,500 and the transitional regime covers the period 2024–2033. A frontier worker who is among the new ones applies the excess of €10,000. These are generic scenarios, without adding names, employers or places: the data to be verified is the temporal condition.

Comparison with net requires a second level. The Swiss percentages are not IRPEF rates: AVS/AI/IPG is 5.3% borne by the employee; AD/AC is 1.1% with a cap of CHF 148'200; LAINF is between 0.7% and 1.5%; LPP is between 7% and 18% by age group, from the 25th year. When the G-permitted reader compares disposable income, these items should be kept separate from the tax credit.

LAMal also remains on a different level: it is health insurance, G border workers have the right of option and the deductibles for adults indicated are between CHF 300 and CHF 2,500. It is not a health tax and should not be confused with the tax at source.

In the comparison of rates, the intermediate range goes from 35% indicated for 2024–2025 incomes to 33% from 2026. 23% remain in the range up to €28,000 and 43% over €50,000. To line up taxable, credit and withholding, you can use the calcolatore fiscale. Its use only makes sense after classifying the scheme: no numerical result can replace the verification of the date and the declarative framework.

Key points

The transition from rule to form can be managed with a short checklist. The goal is not to mix status, fiscal year, and contributory items.

Operational checklist for the single border crossing

1. Set the reference date. Check if you were already a border worker before 17 July 2023. If yes, it registers the exemption of €7,500 and the transitional regime 2024–2033; for new frontier workers it registers the deductible of €10,000.

2. Separate the withholding from the credit. Border workers' earned income is subject to tax at source only in Switzerland. In the Italian passage, the tax credit serves to avoid double taxation.

3. Choose the correct frame. In 730 he indicates the credit for foreign taxes in box G, section III. If you use the PF Income Model, the CE frame is the reference of the model: do not transfer it to the 730.

4. Apply the right year rates. For 2026 use 23% up to €28'000, 33% between €28'001 and €50,000 and 43% over €50,000. For 2024–2025 incomes, it retains the comparison of 23%, 35% and 43%.

5. Keep the other items separate. AVS/AI/IPG, AD/AC, LAINF and LPP are Swiss contributions with the indicated rates; LAMal is health insurance. Do not turn these items into a tax at source.

Tax rates should not be attributed to social security or statistical institutions. Federal and cantonal laws establish them; at the federal level the administration indicated is AFC/ESTV, while the cantonal tax administrations also operate. This distinction avoids looking for the calculation at the wrong institution.

Before closing the file, check that the chosen category, the deductible or exemption and the framework of the declaration are consistent with each other. After ordering this data, go to dichiarazione dei redditi.