Retroactive Tax Returns: How you Can File Them

Have you been saving up for a special occasion or do you want to top up your holiday fund? Then you should consider filing a retroactive income tax return. You can voluntarily submit your tax return for each year anytime in the 4 successive years. If, for example, you have not yet filed your 2020 tax return, your paid taxes are not lost. On the contrary, you are still entitled to your due refund! In 2023, you still have the chance to receive a tax refund from 2019.

By the way: You can file your tax returns for several years at the same time and, thus, significantly increase your potential refund (and save time)!

If you are not obligated to file an income return, you can still file your tax return for 2019 and the following years retroactively until the end of 2023.

As an employee, you are generally not obligated to file a tax return. On the contrary, you are granted a longer deadline for filing a voluntary tax return. Of course, you must not have filed a tax return for the respective years. If you meet these requirements, you can take your time.

You can find out whether you have to file an income tax return in our article on the obligation to file .

When there’s a large gap between the tax year (for which you’re filing a return) and the actual year of submission, you can earn interest on your tax return. The tax office pays interest at a uniform rate from a certain number of months per month. So, if the tax assessment notice is not issued until many months after the respective tax year, you may receive interest payments from the tax office for your retroactive income tax return. Talk about some extra holiday money! Be noted, the same principle applies to back payments as well. If you have tax arrears, you may have to make interest payments to the tax office once you file your returns.

In its ruling of January 13, 2015, the Federal Fiscal Court (Bundesfinanzhof, BFH) has made it possible to retroactively determine loss carryforwards for up to seven years. This is particularly beneficial to students filing an income tax return at a later date.

Students have higher expenses than income. The same also applies to trainees if they had no income during their training period. For these losses, one can claim a loss carry-forward with the tax return. If wage tax is deducted from the first job, the loss carryforward reduces taxes immensely.

Are retroactive tax returns possible after graduation? Does Verlustvortrag apply to students and trainees?

There’s one catch: only the second degree and the second course of study (which are considered as further vocational training) can be officially classified as tax-deductible as income-related expenses (Werbungskosten). This principle does not apply to first studies and first training.

The Federal Constitutional Court has ruled (Ref.: 2 BvL 22/14 and others) that expenses for first studies and first training may not be claimed as income-related expenses.
Instead, they are considered special expenses. These are limited to 6,000 euros per year. However, special expenses only affect your tax assessment if you also have taxable income in the same year.

In most cases, it should be possible to file either your tax return retroactively or carry your loss carry forward for a sufficiently long time. Here are your rough deadlines for retroactive tax filing:

• Tax return 2016
  Limitation period for the tax return: Run out
  Limitation period for the loss carried forward: 31.12.2023
• Tax return 2017
  Limitation period for the tax return: Run out
  Limitation period for the loss carried forward: 31.12.2024
• Tax return 2018
  Limitation period for the tax return: 31.12.2022
  Limitation period for the loss carried forward: 31.12.2025
• Tax return 2019
  Limitation period for the tax return: 31.12.2023
  Limitation period for the loss carried forward: 31.12.2026
• Tax return 2020
  Limitation period for the tax return: 31.12.2024
  Limitation period for the loss carried forward: 31.12.2027
• Tax return 2021
  Limitation period for the tax return: 31.12.2025
  Limitation period for the loss carried forward: 31.12.2028
• Tax return 2022
  Limitation period for the tax return: 31.12.2026
  Limitation period for the loss carried forward: 31.12.2029

Statute of limitations for tax returns: Deadlines and timelines

As described in the previous section, there are limitation periods for the tax return. In addition to the limitation period for loss carry-forwards and the 4-year period for voluntarily filing a tax return, the tax office imposes further requirements for filing the return. Speaking of voluntary filing: When inactive, you can no longer file a voluntary tax return after the four-year period has lapsed.

These additional deadlines must also be observed:

• If there is a mandate to file taxes, the limitation period of four years starts three years after the end of the tax year.
  As an example, for the 2020 tax return, the limitation period for mandatory tax filing starts on 31.12.2023, and lasts for four years. Therefore, the mandatory tax return can be submitted or claimed by the tax office until December 31, 2027.
• In case of tax evasion, the four-year period extends to 10 years.
• If taxes are carelessly withheld, extends to 5 years.