Better deduction of premiums
Since January 2010, you can deduct the premiums you pay for health insurance better and to a greater extent than was the case previously. The legal basis for this is found in the new Citizens Relief Act (Bürgerentlastungsgesetz).
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Who can claim what as a tax-deductible expense?
In general anyone who pays contributions for health care and long-term care, will benefit from the new ruling. Contributions for health insurance and long-term care insurance paid to the statutory insurance schemes as well as to the private ones are counted for tax purposes. This applies to:
- tax payers
- spouses
- partners in the sense of § 1 Section 1 Lebenspartnerschaftsgesetz (LPartG)
- dependent children for whom an allowance in accordance with § 32 Section 6 Einkommensteuergesetz (EStG) or family allowance is claimed
- people legally entitled to maintenance support, e.g. in the case of divorce
Which premiums are tax-deductible for policyholders with compulsory health insurance?
Everyone (regardless of whether insured with entitlement to sick pay or not) can deduct 100% of premiums paid in the respective year. The tax office then deducts a flat rate of 4% of the premiums for the entitlement to sick pay for those policyholders, who have insurance coverage with entitlement to sick pay.
Who sends what information to the tax office?
If you are employed, the employer is responsible for transferring the premium to the health insurance fund and also reports the amount of premiums paid to the tax office at the start of the following year. If you receive a pension from the statutory pension insurance, the pension insurance institute will be responsible for this. If you pay your health insurance premiums yourself, e.g. as self-employed, the health insurance fund will report the premiums to the tax office. These policyholders can also obtain a statement from us regarding the amount of premiums paid. However this is not possible until the start of the following year.
What are the rules regarding reimbursements or bonuses?
Reimbursements or bonuses, which you receive by taking out supplementary policies or by participating in the BIGtionär bonus plan, are regarded as income for tax purposes and must be deducted from the premiums that have been paid. The health insurance fund reports any reimbursements to the tax office with reference to your taxpayer identification number.
What applies in the case of supplementary insurance policies or health cash plans?
Premiums for supplementary policies from statutory health insurance funds with additional benefits cannot be deducted for tax purposes. This also applies to health cash plans from private health insurance providers, which include optional benefits like treatment by the senior consultant or single rooms. However premiums for this may possibly be claimed under other pension and insurance expenditure, provided the maximum limits have not been reached yet.
