If your pension was approved at a later date, your first payment will also be delayed. This raises the question: In which tax year do you need to declare this income?
📌 Quick & Easy
- The cash principle applies to pensions.
- What matters is when the money actually reaches your account.
- Retroactive pension payments must be declared in the year they are received.
- The original entitlement years do not matter.
🚀 Your Guide
- What does the cash principle mean?
- Which tax return is affected?
- Example: Pension approved retroactively from 2024
- How do you enter your pension in the app?
- What applies to back payments for multiple years?
What does the cash principle mean?
The tax office uses the so-called cash principle to tax income. This means: You declare income in the year in which it is actually paid to you – that is, when you have access to the money.
This also applies to pensions. It does not matter for which year the payment was originally intended – what counts is when the money was transferred.
Which tax return is affected?
You must declare the pension in the tax return for the year in which you received the money. This also applies to pensions that were approved retroactively.
Example: Pension approved retroactively from 2024
In 2025, Max Mustermann is granted a retirement pension retroactively starting January 2024. However, the payment for 2024 is not made until August 2025.
Important: Max declares the full pension back payment in his 2025 tax return – because he received the money in that year.
How do you enter your pension in the app?
In the Taxfix app, you start in the "About you" section. There, you indicate that you received a pension during the tax year. Next, you're asked what type of pension you received – for example, a statutory pension or disability pension.
Once you've entered this, the "Income" category will be unlocked. You'll then see all the relevant questions about your pension payments.
If you received a back payment for multiple years, you can also indicate this under "Income." Simply select the appropriate option and enter the total amount.
What applies to back payments for multiple years?
If you receive a one-time back payment for several years – for example, because your pension was retroactively approved starting in 2021 – this will be shown separately on your pension statement for the tax office.
The tax office will automatically check whether reduced taxation applies to this back payment. This means the tax burden can be spread over several years, which is usually more favorable for you.
Good to know: You do not need to submit a separate application. This tax relief check is carried out automatically.
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Still have questions?
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