As the June 30 deadline fast approaches, all individuals and entities possessing a KRA PIN are expected to file their income tax returns for the period 1st January 2022 to 31st December 2022.
Categories of Taxpayers Required to Pay Income Tax
An Income Tax Return is a declaration made by a person showing all income earned from all sources of income during a tax period (usually a year) and the self-assessed tax paid during that year of income.
Every person (individual, company, partnership, etc.) with a KRA PIN is required to file a tax return.
Note
You can file an amended return if you make a mistake while filing.
If you were employed in 2022 and then lost your job, you are required still file a return for that year.
If you had multiple employers in 2022, you are still required to file a return to show all income received from your employers.
You are required to file a NIL return if you had no income in 2022.
If you are employed and have other sources of income from your side hustles, you are still required to declare them in addition to the income you get from your job. Other Sources of Income include businesses, farming ventures and Rentals, among others.
You are required to provide a Book of Accounts – these include an income statement, a balance sheet, copies of withholding certificates (if any) and a record of any advance payment made during the year, including instalment tax.
KRA PIN holders who did not have any income in the last year still have to file an income tax return by June 30, 2023. However, in this case, you will file a NIL return.
Companies/ Partnerships whose accounting period ends in December are required to file their returns by 30th June.
Here’s a complete guide on manoeuvring the Kenya Revenue Authority’s (KRA) iTax portal and how to file Nil.
How to File NIL Returns
A Nil return is a declaration made by a person showing all income earned from all sources of income during a tax period (usually a year) and the self-assessed tax paid during that year of income. In this case, you are required to file returns for the tax period of 1st January to 31st December 2022.
To file a NIL return, follow the following steps;
1. Visit itax.kra.go.ke and provide your PIN Number and password to log in.
2. Go to the Returns tab and select File NIL Returns from the drop-down menu.
3. Your PIN Number will be displayed. on the Type section, select 'Self', and on the Tax Obligation, select ‘Income Tax - Resident Individual’, then click Submit.
4. On the next page, provide the return period from (January 1, 2022, or from when you made the income) and the return period to (December 31, 2022).
5. Once you click submit, you will receive an acknowledgement receipt which you can download and keep.
How To File 2022 NIL Returns
How to File Income Tax Returns for Employment Income Only using the pre-populated option on iTax (ITR)
To file the return, you need a P9 form from your employer. This document contains a summary of tax deductions made by your employer, from January 2022 to December 2022.
You are also required to have the following;
An Insurance Policy Certificate (where applicable), including NHIF contributions.
A mortgage certificate (where applicable)
Tax exemption certificate (where applicable).
1. Visit itax.kra.go.ke and provide your PIN Number and password to log in.
2. Click on the Returns Menu and select ITR for Employment Income Only
3. Enter the Return Period (January 1, 2022, or from when you made the income) and the return period to (December 31, 2022)., select 'Yes' to the question 'Do you have employment income?' and Click 'Next'.
4. Under basic information, answer the questions asked appropriately and Click 'Next'
5. Scroll to Section F, details of employment income, and confirm the name and PIN of the employer, Gross Pay and other allowances as per your P9 form.
6. Scroll to Sheet M, details of PAYE deducted, confirm Employer details, Taxable salary, chargeable pay, Tax payable on taxable salary and PAYE deducted. Details can be modified as per your P9.
7. Scroll to Section Q and capture a payment, if any, made before the filing of the return.
8. Scroll to Section T, Tax Computation, and Enter the defined/pension contribution amount (as per your P9 actual contribution by the employee) and personal relief. Click 'Submit' and download the E-return acknowledgement receipt.
How to File Income Tax Returns for Employment Income Only using the pre-populated option on iTax (ITR)
How to File Income Tax Returns With Multiple P9 Forms
If you have multiple P9 forms, for instance, you changed jobs during the period, here is how to file your tax returns.
1. Visit itax.kra.go.ke and provide your PIN Number and password to log in.
2. Go to the Returns Menu, select 'File Return,' choose Tax Obligation as 'Income Tax - Resident Individuals', then click 'Next.'
3. Download the Excel form by clicking on "Click here' to download Income Tax Resident Individual Return Form (Excel) under number 5.
4. Once you download and open, kindly enable content, under file, select options>trust centre>trust centre settings>macro settings>enable all macros, then click 'OK'.
5. Under file, once again select 'Save As', select a location to save the file and choose the save as type as Excel Macro-Enabled Work Book. Save and close the file. Open it once again and file as guided below.
How to file with more than one p9 form
How to file Excel Template for Employment Income using the Excel (IT1) Option
To file the return, you need a P9 form from your employer. This document contains a summary of tax deductions made by your employer, from January 2022 to December 2022.
You are also required to have the following;
An Insurance Policy Certificate (where applicable), including NHIF contributions.
A mortgage certificate (where applicable)
Tax exemption certificate (where applicable).
Visit itax.kra.go.ke and provide your PIN Number and password to log in.
Go to the Returns Menu, select 'File Return,' choose Tax Obligation as 'Income Tax - Resident Individuals', then click 'Next.'
Download the Excel form by clicking on "Click here' to download Income Tax Resident Individual Return Form (Excel) under number 5.
On the Excel sheet, provide all the mandatory details for the 'Basic Info' sheet A of the return i.e. your PIN Number, select the type of return and appropriate return period
Provide details of the employment income for the year in Sheet F (Employment Income) In case of more than two P9 forms, click on the ADD ROW(S)" button and provide the employment income details.
Proceed to Section M(Details_of_PAYE_Deducted) and fill in the PAYE details as per the first P9 Form for the whole year in rows A3 to E3, then PAYE details as per the second P9 Form for the whole year in rows A4 to E4. In case of more than two P9 forms, click on the 'ADD ROW(S)" button and provide the details as per additional P9 forms.
Section T (Tax Computation), input the total pension for the year in line 11.1 (a total of all the P9 forms, to a maximum of 240,000) and Personal Relief for the year in line 12.6 to a maximum limit of Ksh.28,800.
Click 'VALIDATE' to validate the return and generate an upload file for uploading to iTax.
Taxpayers with Business Income will complete the necessary sheets (e.g. P&L, Balance Sheet) when they answer 'Yes' to the question 'Do you have any income other than business income' in the Basic Information section.
How to file using the Excel (IT1) Option
How to Claim NHIF Insurance Relief
KRA Tax Pin holders can now claim insurance relief in the Income Tax Resident (Itr) Return for the Period 2022
The Finance Act 2021 amended section 31 of the Income Tax Act to allow contributions to NHIF to qualify for Insurance Relief effective January 1, 2022.
Resident taxpayers filing the Income tax Resident (ITR) return for 2022 are guided as follows:
1. Upon filing the return (either Excel form or web-based ITR), select 'Yes' to the question 'Do You Have an Insurance Policy'.
2. Proceed to capture the NHIF details under the iTax ‘Insurance Relief sheet’ as indicated in the chart below.
3. Slot in NHIF PIN and card number and define the type of policy as health.
