Repayment of pension contributions - tax implications
April 30, 2015 | 50,00 EUR | answered by StB Patrick Färber
1. Question:
Can I make retroactive pension insurance contributions due to my divorce?
Can I claim this retroactive payment as special expenses on my tax return?
Are there maximum contribution limits per year?
2. Question:
Can retroactive payments to the pension insurance be claimed as a tax deduction in order to offset a reduction in pension benefits due to early retirement (ATZ regulation)?
Are there maximum amounts that can be claimed here as well?
What happens if both retroactive payments are made in the same year?
Dear questioner,
any payments of contributions into the pension insurance are deductible as special expenses in the year of payment. The reason for the payment does not play a role in this context (e.g. back payments due to divorce and avoiding deductions in partial retirement).
The tax impact of your payments is complicated to explain, but I will try:
There is an annual maximum amount that changes every year, as the deductibility of pension insurance contributions is gradually increased each year due to a transitional regulation. The pensions (gradually) or at the end (=2040) will then be fully taxable.
First stage:
In total, for individual assessments, up to EUR 22,170.00 (in the assessment year 2015, less before) of contribution payments (from you and your employer 18.7%) into the pension insurance are considered, any payments beyond this amount will not be taken into account.
Second stage:
a) Payments made by you alone (without employer contribution of half) will have an impact of 80%, meaning if you voluntarily pay EUR 5,000, this will have an impact of EUR 4,000.
b) For "regular" contributions in the context of an employment relationship (employer 50%, employee 50% of the contribution), these will only have an impact of 60% of the employee's contribution.
Therefore, in the year of payment, you should carefully calculate the total amount of pension insurance contributions being made (by you alone, by you and your employer) in order to maximize the deduction limit. I would recommend having someone calculate this before making a payment.
I hope this information was helpful.
Best regards,
Tax Consultant Patrick Färber
post@richtig-gegensteuern.de
