Italy

Individual - Other tax credits and incentives

Last reviewed - 23 July 2026

Tax credits

An individual who qualifies as Italian tax resident may deduct from gross income tax liability the following main tax credits, provided that all conditions required by Italian tax law are met and expenses are properly documented:

employment tax credits;
family tax credits;
other tax credits for expenses.

Employment tax credits

Employment tax credits vary depending on the type of income:

employment income;
pension income;
self-employment income.

Employment income tax credit

Employment income (EUR)	Tax credit amount
Up to 15,000	EUR 1,955; the tax credit cannot be lower than EUR 690 or EUR 1,380 for fixed-term contracts
15,001 to 28,000	EUR 1,910 + EUR 1,190 x [(28,000 - gross income) / 13,000]
28,001 to 50,000	EUR 1,910 x [(50,000 - gross income) / 22,000]
Above 50,000	0

The tax credit is increased by EUR 65 if gross income is between EUR 25,000 and EUR 35,000.

Pension income tax credit

Pension income (EUR)	Tax credit amount
Up to 8,500	Fixed tax credit of EUR 955; the tax credit cannot be lower than EUR 713
8,501 to 28,000	EUR 700 + EUR 1,255 x [(28,000 - gross income) / (28,000 - 8,500)]
28,001 to 50,000	EUR 700 x [(50,000 - gross income) / (50,000 - 28,000)]
Above 50,000	0

Self-employment income tax credit

Self-employment income (EUR)	Tax credit amount
Up to 5,500	EUR 1,265
5,501 to 28,000	EUR 500 + EUR 765 x [(28,000 - gross income) / (28,000 - 5,500)]
28,001 to 50,000	EUR 500 x [(50,000 - gross income) / (50,000 - 28,000)]
Above 50,000	0

Family tax credits

Generally, tax credits may be granted to resident taxpayers with a dependent spouse, children, and certain other dependent relatives living with the taxpayer, provided that each dependant’s annual income does not exceed the relevant statutory threshold.

The ordinary threshold is EUR 2,840.51. For children under 24 years of age, the income threshold is EUR 4,000.

From March 2022, family tax credits for dependent children have been replaced by the Assegno Unico Universale for children below 21 years of age.

For children below 21 years of age, no ordinary child tax credit is generally claimed in the tax return. Instead, a monthly payment may be requested from the Italian social security authorities. The amount depends mainly on the family economic situation index, ISEE.

Family tax credits for dependent children remain applicable only for children above 21 years of age and below 30 years of age, subject to the relevant conditions.

The family tax credit varies depending on the type of dependant, including dependent spouse, children, and other qualifying relatives.

For a dependent spouse, the maximum annual tax credit is EUR 800, decreasing as taxable income increases and generally phased out up to EUR 80,000 of income.

For other cohabiting dependants, such as parents and grandparents, a tax credit may also be available, subject to the relevant legal requirements and income thresholds.

Other tax credits

Certain expenses entitle the taxpayer to a tax credit. The ordinary tax credit rate is 19% of the total amount paid, subject to specific limits and conditions.

Mortgage interest credit

A tax credit is granted on interest on mortgage loans for real estate used as the habitual abode in Italy, provided that the legal requirements are met.

The tax credit is equal to 19% of the mortgage interest paid.

The maximum amount on which the tax credit is calculated is EUR 4,000.

Medical expenses credit

The tax credit is equal to 19% of medical expenses paid for the amount exceeding EUR 129.11, provided that the expenses are duly supported by receipts.

Education expenses credit

University expenses are deductible up to an amount equal to the cost charged by public educational institutions, as determined annually by the education authority.

For nursery, elementary, secondary, and high school, the maximum educational expense on which the 19% rate is calculated is EUR 1,000 per year per child.

School fees for registration of children up to three years old are deductible at 19% on a maximum expense amount of EUR 632.

Life and accident insurance credit

Life and accident insurance premiums may be deductible, if related to death, invalidity, or non-self-sufficiency, up to a maximum amount of EUR 530.

Sporting association fees credit

Sporting association fees for children between 5 and 18 years old are deductible at 19% on a maximum expense amount of EUR 210 per year per child.

Rental fees credit

A fixed tax credit, depending on the total income of the taxpayer, is available for annual rental fees paid for the principal abode under certain conditions.

This tax credit is available only for individuals with gross taxable income below EUR 30,987.41.

Reduction for high-income taxpayers

For taxpayers with total income exceeding EUR 200,000, certain tax credits for expenses deductible at 19% are reduced by EUR 440.

The reduction does not apply to medical expenses, donations made to political parties, or insurance premiums covering the risk of catastrophic events.

Flat tax scheme for self-employed individuals

The flat tax scheme, Regime forfettario, was introduced by Law no. 190/2014.

As a rule, it provides that taxable income is determined on a lump-sum basis and subject to a 15% flat tax rate, with exclusion from VAT, IRAP, and ISA obligations and without the application of withholding taxes.

Eligibility for the flat tax scheme is subject to certain criteria and limits.

The Budget Law for FY 2023 increased the annual income threshold to EUR 85,000, and this threshold remains unchanged.

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