Premiums for health insurance on a lump sum and tax card

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Recently, there has been a lot of publicity about the health insurance premium paid by entrepreneurs. All this is due to the changes announced as part of the Polish Order, which will affect the method of determining the health insurance contribution and the possibility of its deduction. In the article below, we will show how health insurance contributions are treated in the case of taxpayers taxed with a lump sum or with a tax card.

Lump sum health insurance contributions

The registered lump sum is one of the forms of taxation of economic activity. The most important feature is taxation of the obtained income without the possibility of deducting tax deductible costs.

However, the inability to deduct costs does not mean that the health insurance premium paid by the taxpayer does not affect the tax settlement method.

Well, as we read in Art. 13 of the Act on flat-rate tax, a lump-sum tax on recorded revenues is first reduced by the amount of the health insurance premium paid by the taxpayer, as referred to in art. 27b paragraph. 1 of the Income Tax Act, if it has not been deducted from the income tax. In the case of making the reduction referred to, the provisions of Art. 27b paragraph. 2-4 of the Income Tax Act.

According to the mentioned Art. 27b of the PIT Act, the income tax is first reduced by the amount of:

  1. premiums for health insurance, referred to in the Act of 27 August 2004 on health care services financed from public funds:

    1. paid in the tax year directly by the taxpayer in accordance with the provisions on healthcare services financed from public funds,
    2. collected in the tax year by the payer in accordance with the provisions on healthcare services financed from public funds

- the reduction does not apply to contributions the basis of which is tax-exempt income (revenue) under the Act, and contributions whose assessment basis is income from which tax collection has been waived pursuant to the provisions of the Tax Ordinance;

  1. premiums paid in the tax year from the taxpayer's funds for compulsory health insurance of the taxpayer or persons cooperating with him, in accordance with the provisions on compulsory health insurance in force in a Member State of the European Union other than the Republic of Poland or in another country belonging to the European Economic Area, or in the Swiss Confederation .

The amount of the health insurance contribution by which the tax is reduced may not exceed 7.75% of the basis for the assessment of this contribution. The amount of expenses is determined on the basis of documents confirming their incurrence.

The amount of the health insurance contribution paid by the taxpayer is required to show in part J of the PIT-28 declaration. It should be emphasized that the deduction of the health contribution from the tax takes place at the stage of paying the monthly / quarterly recorded lump sum.

In addition, it should be remembered that only the health insurance contributions paid are deductible from the tax. Accrued but unpaid health insurance contributions cannot be deducted from the tax. On the other hand, the overdue payments reduce the tax at the time of their payment.

It is also worth adding here that the health insurance contribution paid under KRUS is not deductible. As indicated by the Director of IS in Bydgoszcz in the interpretation of November 10, 2016 (No. 0461-ITPB1.4511.817.2016.1.DR), the taxpayer cannot reduce the flat-rate income tax by the amount of the health insurance premium paid to KRUS, because the contributions were paid in accordance with the provisions of the Act on premiums for health insurance for farmers and are closely related to the agricultural activity carried out, and to the income generated from it, pursuant to Art. 2 clause 1 point 1 of the PIT Act, the provisions of the Personal Income Tax Act, to which the above-mentioned art. 13 sec. 1 of the Lump-sum Income Tax Act.

Health insurance contributions paid by the entrepreneur are deductible from the flat-rate tax and shown in the annual PIT-28 tax return.

Health insurance contributions on the tax card

Premiums for health insurance, referred to in article 1. 27b of the PIT Act, are also deductible in the case of taxpayers conducting business activity taxed in the form of a tax card.

According to Art. 31 of the Act on flat-rate tax, the income tax in the form of a tax card resulting from the tax decision, the taxpayer reduces by the amount of the health insurance premium paid in the tax year, in accordance with the provisions on healthcare services financed from public funds, provided that it has not been deducted from income tax.

The amount of the health insurance contribution, by which the tax card is reduced, may not exceed 7.75% of the basis for the assessment of the contribution specified in separate regulations.

After the end of the tax year, by January 31, the taxpayer is obliged to submit to the tax office an annual PIT-16A declaration on the amount of the health insurance premium paid and deducted from the tax card in individual months.

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In the case of a tax card, the amount of the monthly tax is determined by the head of the Tax Office by way of a tax decision. The tax is payable by the seventh day of the following month, and for December - by December 28 of the tax year, to the account of the tax office. The amount of this tax is reduced by the health insurance premium paid by the taxpayer.

Due to the paid and deducted health contributions, the taxpayer using the tax card is required to submit a PIT-16A return by January 31 of the year following the tax year. It should be emphasized that this declaration only shows the amounts of health insurance contributions deducted from the tax.

The above-mentioned regulations show that the taxpayer should show health insurance premiums in the PIT-16A declaration in the month of their incurring and deduction. This means that the contribution for voluntary health insurance, e.g. for January paid in February, can be deducted from the tax in the form of a tax card payable by February 7 (provided that the health insurance contribution was paid before the tax payment date). It is not possible to deduct the due but unpaid contribution from the tax. It is also not possible to deduct the premium paid in another month.

In the context of the above, the Director of IS in Bydgoszcz in the interpretation of September 2, 2014 (ITPB1 / 415-650 / 14 / PES) indicated that it is not possible to deduct the voluntarily paid health insurance for the months in which business activity is suspended. The tax authority emphasized that the contributions for voluntary health insurance paid during the months of suspension of business activity, the taxpayer cannot deduct from the due amount of the tax liability resulting from the tax card for the months in which the activity was not carried out (the tax was not paid).

However, premiums paid and not deducted in the tax year may, however, be shown in the declaration of the amount of the health insurance premium paid and deducted from the tax card in individual months of the PIT-16A tax year.

The paid health insurance contribution is deductible from the tax card. The amount of tax is determined by a decision of the head of the tax office, therefore the taxpayer does not submit an annual tax declaration on this account. The taxpayer submits the annual PIT-16A declaration for the health insurance premium paid.

Moving on to the summary, it should be pointed out that both in the case of a registered lump sum and a tax card, it is possible to deduct the paid health insurance from the tax, which significantly reduces the amount of tax payable.