The Right to a Tax Refund for 2020 Expires on December 31, 2026

Who This Affects

Only those who actually paid income tax may be eligible for a refund. The overpayment may have arisen, for example, from working for only part of the tax year, unemployment, unpaid leave, changing employers, unclaimed tax credit points, donations, pension contributions, or a change in personal circumstances.

The Deadline and Filing Process

A refund request may be filed for up to six tax years retroactively, and the deadline is final. Salaried employees may file Form 135 online and attach, among other things, Forms 106 from their employers and supporting documents for income, payments, and tax benefits. After review, the approved amount is transferred to the bank account.

Interest and Indexation

Under Section 159A of the Income Tax Ordinance, annual interest at a rate of 4% and indexation differentials are added to the amount overpaid. According to Israel Tax Authority data, about nine out of ten requests ultimately result in a refund.

Why the Outcome May Not Be Only a Refund

After the request is filed, the tax file is reviewed in full, and the request cannot be withdrawn if a debt is discovered. Income that was not taken into account—including pension payments, unemployment benefits or maternity benefits, payments to military reservists, and occasional income—may reduce the refund or create a debt. In calculations for spouses, one spouse’s debt is sometimes offset against the other spouse’s refund.

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