BIR Form 2305 for claiming PWDs as dependents

(Revenue Memorandum Circular Nos. 42 and 43- 2017, June 20, 2017)

This Tax Alert is issued to inform all concerned on the revised BIR Form 2305 (Certificate of Update of Exemption and of Employers and Employee’s Information).

The new version provides for the columns for claiming of a person with disability (PWD) as dependent to entitle the taxpayer to the additional exemption pursuant to RA No. 10754 (An Act Expanding the Benefits and Privileges of PWD). The name and birthdate of the qualified dependent shall be encoded in Part III of the revised form. It is also important to tick the “Mark if PWD/Mentally/Physically Incapacitated” box and indicate the PWD Identification Number.

To claim the PWD as dependent, the following documents shall be submitted by the employees to their employers, for the first year of claiming the exemption and three years thereafter or upon renewal of the PWD ID whichever comes first:

  1. Duly accomplished BIR form No. 2305;
  2. Photocopy of PWD Identification Card issued by the PDAO or the C/MSWDO of the place where the PWD resides or the NCDA;
  3. Sworn Declaration/ Identification of Qualified Dependent PWD, Support and Relationship;
  4. Birth Certificate of PWD;
  5. Medical Certificate attesting to disability issued in accordance with the IRR of RA 10754; and
  6. Brgy. Certificate attesting to the fact that the PWD is living with the benefactor.  

Employers shall ascertain if the claimed PWD qualifies as an additional dependent by satisfying the following conditions, regardless of age:

  1. Filipino citizen;
  2. Within 4th civil degree of consanguinity or affinity to the taxpayer/benefactor;
  3. Not gainfully employed; and
  4. Chiefly dependent upon and living with the taxpayer/benefactor.

The maximum number of qualified dependents remains at four (4).