If the taxpayer is awarded a disability pension, he or she is entitled to claim a monthly or annual disability tax credit.
Act No. 155/1995 Coll., on Pension Insurance, makes a distinction depending on the degree of disability:
- invalidity pension for first degree disability if the insured person's working capacity has decreased by at least 35% but not more than 49%
- disability pension for second degree disability if the insured person's working capacity has decreased by at least 50% but not more than 69%
- disability pension for third degree disability if the insured person's working capacity has decreased by at least 70%.
Work capacity means the insured person's ability to engage in gainful activity commensurate with his or her physical, sensory and mental abilities, taking into account education, experience and knowledge and previous gainful activity. Decrease in working capacity means a decrease in the ability to engage in gainful activity as a result of limitations in the physical, sensory and mental capacities compared with the insured person's condition before the onset of the long-term adverse health condition.
In the first two above-mentioned cases, Act No. 586/1992 Coll., on Income Taxes, grants the so-called. basic disability allowance in the amount of 210,- CZK per month / 2.520,- CZK per year (§ 35ba(1)(c)).
In the third case, the so-called. extended disability allowance in the amount of 420,- CZK per month / 5.040,- CZK per year (§ 35ba(1)(d)).
The employee claims and proves the entitlement to the discount to the employer in accordance with Section 38l(2) of the Income Tax Act:
- tax declaration
- a decision granting an invalidity pension
- annually by proof (certificate) of pension payment
Entitlement to basic or extended disability allowance can apply Also a taxpayer whose entitlement to an invalidity pension has ceased because of the concurrent entitlement to payment of that invalidity pension and an old-age pensionor its the application for a third degree disability pension was denied on grounds other than that the taxpayer was not a third degree invalid.
In this case, the employee proves eligibility for basic or extended disability benefits confirmation from the local tax office (by place of residence) on the fulfilment of the conditions for recognition of the tax credit - see form MFin 5458 (Section 38l(2)(c) of the Income Tax Act).
