Olim Hadashim (New Immigrants) are entitled to income tax credit points for 42 months from their immigration date into Israel.
- The benefit is given as follows (the refund is given on a yearly basis):
- For the first 18 months after making aliyah the oleh is entitled to 3 monthly points (i.e. NIS 648 per month).
- For the next 12 months the oleh is entitled to 2 monthly points (i.e. NIS 432 per month).
- For the remaining 12 months the oleh is entitled to 1 monthly point (i.e. NIS 216 per month).
- The counting of the 42 months starts when the oleh receives the teudat oleh (immigration certificate) and continues also uninterrupted even if the oleh has no income. I.E. - if the oleh has no income during the 42 months, he/she can not take advantage of the benefit.
- The period of regular IDF service or the study period in a tertiary educational institution will not be taken into account. In other words, an oleh who emigrated to Israel and enlisted in the IDF or started studying at a tertiary educational institution before having completed 42 months in Israel, can enjoy the benefit after discharge from the IDF or after the completion of studies. If the oleh has taken advantage of some of the benefit before enlisting or before starting studies, the oleh will be eligible after release from the army or conclusion of his/her studies, for the rest of the benefit which has not yet been utilized.
How is the benefit calculated?
- The benefit is given according to months since aliyah, but in actuality is a yearly refund given for each tax year. For every tax year the seniority of the oleh each month will be checked and the monthly number tax credit points will determine the amount of the yearly tax refund.
- If the oleh has not worked for a number of months during a tax year, he can take advantage of his/her tax points for the deduction of taxes which he/she must pay on his/her salary during that part of the year in which he/she did work.
If the oleh started to work only on 01.12.2010, i.e. he/she worked for only one month during the tax year, he/she can receive the full 12 credit points from income tax during that month.
In 2011 the oleh will be entitled to 3 credit points for every one of the months of the year (in total 36 credit points for 12 months). The oleh can take advantage of the full 36 points during the tax year even if he/she has not worked during part of that year.
Who is Eligible?
- Oleh Hadash (New Immigrant) who has Income Tax Deducted (Withheld) from His/Her Salary
How to Claim It?
- A 101 Form must be filled out and delivered to the employer before the end of the tax year (i.e. before the end of December).
- A copy of The Oleh's certificate must be attached.
- Those who are self- employed should fill out a Form 1301 Annual Report at the end of the tax year and attach a copy of the oleh certificate to it.
- If the tax year has passed, the oleh can file an application for a tax rebate with the tax assessing officer at his/her local office. To locate the office of the assessing officer in accordance with your place of residence. Rebates can be received up to six years retroactively.
- Credit points are given to employees who are Israeli residents only.
- Credit points are given to an oleh in addition to the 2.25 credit points given to the oleh for being an Israeli resident.
- If the oleh meets other criteria that entitle him/her to tax credit points, he/she is able to add up all of the credit points for which the criteria are met (unless specifically specified otherwise). For more information on eligibility see the Income Tax Credit Points portal.
Laws and Regulations
- The Income Tax Ordinance - Section 35.
- Translation provided by The Shira Pransky Project.