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Tax Refunds for Employees in Israel: who qualifies, how many years back and how to apply yourself

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In short

  • Your employer deducts tax based on the information it has. When that is incomplete — part-year work, several employers, unused credit points — too much tax is deducted.
  • You can claim a refund (החזר מס) for the last 6 tax years. In 2026 you claim for 2020–2025, and 2020 closes at the end of 2026.
  • You apply yourself to the Tax Authority, usually with a short return (Form 135), without paying anyone.
  • Tax refund companies usually take a percentage. It is convenient but not required.

Common reasons for a refund

  • You worked only part of the year: started a job, were laid off, studied, were on maternity leave or reserve duty.
  • You worked for several employers in the same year without tax coordination.
  • You did not get credit points you were entitled to: children, a degree, aliyah, army discharge, single parenthood.
  • You donated more than ₪207 a year to a recognised institution: 35% of the donation comes back, up to a cap.
  • You paid for private life insurance: a 25% credit, up to a cap.
  • Tax was deducted from a benefit or pension.
  • You have a disability of 90% or more, or are blind: your earnings may be tax-exempt.

Deadline

A refund is due if the return for that year is filed within 6 years of its end. In 2026 you can file for 2020–2025. If you do not file for 2020 by the end of 2026, you lose that year.

How to apply yourself

  1. Collect Form 106 from every employer for each year, plus confirmations: donations, life insurance, certificates (degree, aliyah, discharge).
  2. Log in to your personal area on the Tax Authority website and fill in a refund request, usually a short return (Form 135), for each year separately.
  3. Attach the documents and submit. The refund is paid to your bank account with linkage and interest.

Tax refund companies

Many companies offer a free check and take a percentage of the refund. You can file the same request yourself. If you use a company, check how much it charges and whether the price includes VAT.

Frequently asked questions

Do I need an accountant?

Not necessarily. An employee without complex income can file in the personal area. If you have a business, rental property or foreign income, get advice.

What if it turns out too little tax was deducted?

If the calculation shows less tax was deducted than required, you may have to pay the difference. Check the calculation before filing.

I am a new immigrant. Am I owed anything?

Immigrants get credit points in the months after aliyah (54 months for those who arrived from 2022). If your employer did not know, you may be owed a refund.

How long does a tax refund take?

Under the Income Tax Ordinance, a refund based on a return is paid within 90 days of filing, and not before 31 July of the year after the tax year. It is index-linked with 4% annual interest.

Calculators for this topic

  • Tax Credit Points

    Each credit point cuts your income tax by ₪242 a month. Children, aliyah, army service, a degree — and missed points can be reclaimed for past years.

  • Disability Tax Exemption (9(5))

    People with a disability of 90% or more, or who are blind, pay no income tax on earnings up to ₪445,200 a year.

  • Income Support

    A benefit from age 20 for people with no income or low income. Paid only from the month you apply, so do not wait.

Sources

This is general information, not legal advice. Amounts are correct as of the review date and change every January.