Tax-free pension 2024 – from when? How much can a pension be tax deductible? Who will lose?

Individual parties from the parliamentary majority went to the elections with various plans to increase the average citizen's budget. Will Poles save more money in 2024 than last year? Since when will pensions become tax-free?

Contents

1. How much is the tax-free pension?
2. What will indexation be in 2024?
3. Tax-free retirement in 2024 is a certainty! How long?

How much is the tax-free pension?

Details from pre-election announcements, such as a higher tax-deductible amount or Pensions without PIT The signed coalition agreement was not taken into account. It is difficult to conclude from the ruling on reducing the tax burden on employees exactly what changes it will lead to. Pensioners are waiting for the promised changes.

Currently, according to the changes introduced by the outgoing government to the tax code, they do not pay tax on an annual income of PLN 30,000, which means that people who receive a monthly pension amounting to a total of PLN 2,500 do not pay tax. But this does not mean that they receive this amount in cash, because regardless of the benefit amount, 9% is deducted from it for health insurance.

What will indexation be in 2024?

In 2023, retirees received exceptionally high raises. The annual index reached 14.8%. At the same time, the lowest pensions were increased not as a percentage but by an amount of no less than PLN 250. Can seniors count on a similar increase in funds in 2024? For now, they can rely on the increase percentage and indexation rate As of March 1, 2024 it is set at 12.3%.. This means that the legal minimum pension will rise from 1,588.44 zlotys to 1,783.82 zlotys, i.e. by 195 zlotys. The average pension paid by ZUS, which is about PLN 3,450, will rise to PLN 3,874.

Coalition members, who have a chance to form a new government, which will likely be appointed later this year, have promised to amend the budget. This means a new budget law for 2024, but the benchmarking ratio is not expected to be reduced, so the current amount of pension increase can be considered certain. Perhaps the percentage will increase slightly, which will increase pensions even more.

Tax-free retirement in 2024 is a certainty! How long?

Increasing pensions while leaving the current amount tax-free would risk a large group of beneficiaries falling beyond the income threshold of PLN 30,000 per year and having to pay the tax due. In the 2023 tax return, a pensioner who receives PLN 2,500 does not have to pay tax. After indexing according to the specified index of 12.3%, they will receive PLN 2,807.50 and will automatically exceed the annual tax-free amount and will have to pay to the tax office. It will be a low amount, slightly exceeding the monthly increase due to the revaluation, but still.

This fact may encourage the new government to decide to increase the tax-free amount to the promised amount of PLN 60 thousand already in 2024. This should be one of the first decisions that will definitely increase the credibility of the new government. He will extract from his opponents arguments that he came to power thanks to false pre-election announcements.

If the amount of tax exemption increases to PLN 60,000, those receiving monthly benefits up to a total of PLN 5,000 will be exempt from tax. If the new government introduces these changes and the House of Representatives adopts them, retirees will be able to benefit from them as early as 2024.

Those whose annual benefits do not exceed the new tax-free amount will immediately receive the full pension amount.

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