Offsetting the reimbursement of health insurance contributions

The reason for or the extent of a reimbursement of health and long-term care insurance contributions does not change the fact that the reimbursement leads to taxable income as negative special expenses.

Contributions reimbursed by the health and long-term care insurance for previous years must also be offset against the contributions paid in the current year and the remaining reimbursement surplus added to the taxable income if the reimbursement is based on the fact that a social insurance relationship has been reversed or converted retroactively. With this ruling, the Federal Fiscal Court has also made it clear that the regulations on offsetting and adding back reimbursed special expenses do not violate the constitutional prohibition of retroactivity or the principle of the protection of legitimate expectations.

The case was brought by a married couple whose health insurance relationship had been retroactively assessed differently for 13 years, resulting in a refund of around 40,000 euros, which led to a correspondingly high one-off tax burden. However, the Federal Fiscal Court clearly rejected a change to the original assessments, which would have been significantly more favorable due to the progressive tax rate, even in such an extreme case.