Do Bonus Payments from Health Insurers Remain Tax-Free?
Some health insurance companies reward their insured persons with a premium for health conscious behavior. These payments do not usually need to be declared in the tax return.
Health insurance contributions count towards advance expenses and can be deducted from the tax. This reduces income and tax liability. However, for the tax office to actually only consider the contributions that the insured persons have actually paid, they must also declare contribution refunds from the health insurance company. The Federal Taxpayers' Association refers to a letter from the Federal Ministry of Finance in this regard.
Some health insurance companies pay contributions back, for example, if certain benefits are not claimed for a certain period of time. Bonus payments, such as those many insurers offer for preventive measures or membership in a fitness studio or sports club, do not need to be declared in the tax return. These payments are generally not taxed.
Possible need for proof for bonus
The Federal Ministry of Finance has now clarified that tax offices, for simplification reasons, automatically recognize bonus payments up to a maximum of 150 Euros. However, any amount above this is considered a contribution refund.
This means that taxpayers, who receive more than 150 Euros per year as a bonus from their health insurance company for health conscious behavior, must provide proof to the tax office that it is not a contribution refund. Only then can they ensure that amounts exceeding this limit are not taxed.
- Private health insurances often offer incentives to their consumers, such as lower premiums for health-conscious behavior, which do not require declaration in the tax declaration, as stated in the text from the Legal Health Insurers.
- The Association of Taxpayers advises individuals to declare contribution refunds from their health insurance companies to the Tax Office, as they count towards health insurance contributions and can impact income tax liability.
- Bonus payments, commonly offered by health insurance providers for preventive measures or fitness club memberships, do not need to be declared in the tax declaration and are generally exempt from taxation, according to the Guide on health insurance.
- If consumers receive bonus payments exceeding 150 Euros annually from their health insurance companies for health-conscious behavior, they are required to provide proof to the Tax Office to avoid being taxed on these amounts, as per the latest clarification from the Federal Ministry of Finance.
