When will I receive the special expenses deduction?
In addition to the allowances, the tax incentives for the Riester pension provide a financial benefit for investors. You can deduct not only your own contributions but the entire savings amount, including the government allowances, up to the specified maximum limit as special expenses on your tax return.
As part of the tax return, the tax office automatically checks whether the government allowances or the deduction for special expenses offers a greater advantage for the insured person. If the tax benefit is higher than the allowances, the tax office refunds the difference. To claim contributions as special expenses in the tax return, you need the certificate from the Riester provider. You must also fill in the "Anlage AV".
Even if you have not yet received your provider's certificate, you should submit your income tax return. Generally, the tax office already has an electronic notification from the Riester provider, so the tax office can take your Riester contributions into account.
Since 2008, a maximum of 2,100 Euro can be deducted as special expenses. The tax benefits are particularly worthwhile for high-earning savers.
You must claim the deduction for special expenses in your income tax return for the year in which you paid the contributions into the Riester contract. Not only your own contributions but also the Riester allowances are eligible. The decisive factor is always your allowance entitlement, not the actual allowance paid. Even if you do not apply for an allowance, the allowance entitlement can be deducted as special expenses and is added in the income tax assessment. It is therefore not possible to forgo the pension allowance and instead take the tax advantage for yourself. However, always remember to pay at least the basic amount, including for a spouse who may only be indirectly eligible.
Please also note the following information: The provider of your pension contract transmits the pension contributions to be taken into account, including the contract data, identification number, and allowance or social security number, to the tax authorities via data transmission. As mentioned, you must submit the Anlage AV if you are applying for a deduction for special expenses. By submitting the Anlage AV, the additional deduction for special expenses is claimed for all (!) transmitted pension contributions.
If you do not wish to claim a deduction for special expenses for all transmitted pension contracts, please do not submit the Anlage AV.
Multiple pension contracts
If you exceptionally have multiple pension contracts, it becomes quite complicated, and you should note the following:
- The pension allowance is only granted for two of these contracts.
- However, there is no such limit for the deduction for special expenses.
- If you submit the Anlage AV, the deduction for special expenses is granted for all transmitted pension contracts; more precisely, it is calculated and then capped.
- If you do not want to claim the additional deduction for special expenses for all contracts, please make entries in lines 31 to 40.
The advantage of waiving the deduction for special expenses is that the later pension from this contract is not taxed in full but only at the more favourable rate. In addition, the contributions can be deducted as other pension expenses within the maximum limits, provided there is still "leeway". However, for the slightly more favourable taxation later, no "Riester allowance" may have been granted for the affected contract.
The allowance beneficiary can declare to their provider that they do not intend for the tax authorities to take into account the pension contributions paid to the provider for the respective contract when determining the deductible special expenses under § 10a of the Income Tax Act (§ 10 para. 4 sentence 1 Pension Implementation Regulation). If the provider has such a declaration, they will no longer transmit any data to the tax authorities from the following year.
