Which health and nursing insurance contributions can I claim?
You can enter your full health and nursing insurance contributions for basic cover as special expenses in your tax return. The tax office deducts a flat rate of four per cent for sickness benefit from the contributions paid to statutory health insurance.
For those privately insured: Costs for health and nursing insurance are only recognised up to the basic contribution of the private health insurance. Optional benefits, such as treatment by the head physician or a two-bed room in hospital, are considered under "other insurance contributions" if there is still room within the deductible maximum amount.
If you have a more comprehensive contract, the private health insurance will determine the exact proportion of basic cover. If your health insurance contributions do not exceed the maximum amount of 1.900 Euro (2.800 Euro for self-employed), you can claim contributions for other insurances. Favourable contributions include those for unemployment insurance, additional health or nursing insurance, private disability insurance, accident or liability insurance, or term life insurance. Endowment and pension insurance policies can be considered as special expenses if the policies were taken out before 2005.
A married couple pays a total of 4.600 Euro in contributions for health and nursing insurance in a year without sickness benefit. This means the contributions exceed the joint maximum amount of 3.800 Euro (twice 1.900 Euro). Nevertheless, they are deductible as special expenses to this extent, but further insurance contributions, such as accident or motor vehicle liability insurance, can no longer be deducted.
Since the general contribution rate for those with statutory insurance covers sickness benefit, contributions are reduced by 4% on a flat-rate basis. The reduction only applies if there is an entitlement to sickness benefit in the event of illness. The reduction is made by the tax office. Until 2014, the reduction did not apply to the income-independent additional contribution. Since 2015, the following legal situation applies: The newly designed fund-specific income-dependent additional contribution is now considered an integral part of the health insurance contribution and is therefore included in the assessment basis for calculating the four per cent reduction amount. The contribution is no longer differentiated into a basic contribution and the additional contribution.
(2023): Which health and nursing insurance contributions can I claim?
How are excesses in health insurance taken into account for tax purposes?
Individuals with private health insurance often pay medical bills up to a certain amount out of their own pocket to preserve the premium refund, which can often amount to up to six months' premiums. Although the premium refund reduces the deductible insurance premiums for the special expenses deduction, resulting in a lower tax saving.
However, many believe this disadvantage can be offset by claiming the self-borne medical expenses as extraordinary expenses according to § 33 EStG, thereby achieving a corresponding tax saving.
Medical expenses borne by the individual due to a tariff-based deductible or opting for a premium refund are not "contributions" to health insurance and therefore cannot be deducted as special expenses (BMF letter dated 19.8.2013, BStBl. 2013 I p. 1087, para. 69). The BFH has also confirmed that self-borne costs in the event of illness do not constitute insurance contributions and cannot be deducted as special expenses.
These are not "contributions" to health insurance. Rather, they are medical expenses and can only be claimed as extraordinary expenses according to § 33 EStG (BFH ruling of 1.6.2016, X R 43/14).
Medical expenses borne by yourself are medical costs and can therefore only be deducted as extraordinary expenses according to § 33 EStG. However, there is a restriction: they do not have a tax-reducing effect up to the amount of the reasonable burden.
This reasonable burden depends on your income, the number of children, your marital status and amounts to between 1 and 7% of the total income. It is therefore generally higher than the anticipated premium refund from the health insurance and the corresponding self-borne medical expenses.
This means: Medical expenses up to the deductible are neither deductible as special expenses nor as extraordinary expenses.
(2023): How are excesses in health insurance taken into account for tax purposes?
Can employer subsidies be fully credited towards the basic contributions?
Contributions to basic health insurance and compulsory nursing care insurance have been fully deductible as special expenses since 2010. However, those who receive tax-free subsidies from their employer as privately insured individuals must have these credited.
According to the tax authorities, the subsidies are always fully allocated to the basic health insurance and only reduce these contributions. This applies even if optional benefits are included (§ 10 para. 2 no. 1 EStG).
Since the employer's subsidy also applies to contributions for optional and comfort services, it would be plausible to allocate it according to the composition of the contributions into basic and comfort insurance. This would mean that the self-paid contribution share for basic coverage is higher and consequently the tax saving is greater. The question, therefore, is whether tax-free employer subsidies for private health insurance should be fully or partially credited to basic coverage.
The Federal Fiscal Court has confirmed the practice of the tax offices: The tax office may fully credit the tax-free employer subsidy to the contributions for basic coverage, even if the insurance contract includes optional and comfort services. The subsidy does not have to be proportionally divided between basic and optional services (BFH ruling of 2.9.2014, IX R 43/13).
(2023): Can employer subsidies be fully credited towards the basic contributions?
