Tax credit for electricity for 2023
You can gain a tax credit for electricity only for January–April 2023.
If your permanent home’s electricity bills were high in January–April 2023, you can gain a tax credit for electricity in your 2023 taxation. If the conditions for the tax credit are met but you have not claimed the credit on your 2023 tax return, you can file a claim for adjustment with the Assessment Adjustment Board.
How much is the credit?
If the total 4-month cost exceeds €2,000 you are entitled to the tax credit. The size of the credit is 60% of the part going over the 2,000-euro threshold.
- Maximum credit is €2,400 per 1 permanent residence. This means that the maximum value is specific for one electricity meter, not taxpayer-specific. For example, a married couple can be given max. €2,400 credit.
- If you use more than one permanent residence, the credit can still only concern one permanent residence. No tax credit for electricity is available for summer cottages, holiday homes, etc.
- For the maximum credit, you would have to pay a total 4-month cost of 6,000.
- There is a threshold of €100, applied on the electricity credit and all other credits for household expenses. This means that if you claim no other credits for household expenses, the 100-euro threshold is subtracted from your credit for electricity. However, the credit has no impact on the work costs that qualify for the usual credit for household expenses; and it has no impact on these costs’ maximum creditable value.
- You and your partner who lives together with you can divide the tax credit, if both of you pay for electricity.
Example: Electricity during January, February, March and April 2023 cost €3,000 in your permanent home, according to the billing you receive from the power company. The credit calculations concern the part incl. VAT that exceeds €2,000. In this example, it is one thousand euros. The credit is 60% × €1,000 = €600.
If you claim no other credit for household expenses, you must first subtract the 100-euro credit threshold from the €600 above. Accordingly, you get €500 in tax credit.
Example: Your partner owns a one-family house. You and your partner live there together on a permanent basis. Electricity during January, February, March and April 2023 cost €3,000 according to the billing the two of you receive from the power company. If each of you pays part of the cost, each of you must claim tax credits reflecting the 2 individual parts.
The qualifying part of the expenses is the part exceeding €2,000 in other words, €1,000. Assuming that you and your partner divide it fifty-fifty, credit base is €500 for each of you. The credit is 60 percent of that, i.e. 60% × €500 = €300.
Thresholds concern each person individually, so each of you must first subtract €100 unless you claim credits for other household expenses as well. After the above subtractions, each of you are credited €200.
What to do if you want to claim adjustment
Go over your electricity bills
Check your paid electricity bills for 4 months carefully: January, February, March and April 2023. The date when you pay the bill or invoice is not important — but you must pay it in 2023.
If it is still unclear how much the actual 4-month cost has been because you have not yet received the bill, you can estimate it.
Include the price with VAT and the basic monthly charge. No tax credit is available concerning electricity transmission. Accordingly, your calculation must not contain any charges related to transmission of electricity. Please contact your power company to ask about the meaning of the different amounts stated on the bills, if necessary.
Note: The creditable paid expense included in the bills is the actually used electricity from January to April. Do not include electricity for December 2022 in your calculation even if you might receive a bill with a January 2023 due date. However, your calculation should contain the electricity for April 2023 although the due date for payment might be in May.
If the total 4-month cost exceeds €2,000 you are entitled to the tax credit.
Make a claim for adjustment in MyTax
If you request a tax credit for electricity retroactively, you must submit a claim for adjustment of individual income tax for 2023.
See the instructions for filing a claim for adjustment
If you file in MyTax, select “credit for household expenses” as the subject of the claim for adjustment.
If you file on paper, use the form Claim for adjustment of income tax – individuals. Fill in Form 14D Tax credit for electricity – household expenses related to electricity costs 2023 and attach it to your claim for adjustment.
Have you received basic social assistance or assistance with electricity costs from Kela?
Note: If you have been granted basic social assistance for an entire electricity bill, you can no longer receive any tax credit for electricity or assistance with electricity costs on the basis of that particular bill. The same goes for other direct forms of public financial support related to recent rise in the price of electricity. Kela informs the Tax Administration online of the beneficiaries of the Kela-paid assistance.
Retroactive reimbursement for electricity costs
The retroactive reimbursement for electricity costs supplements the tax credit for electricity granted by the Tax Administration and the assistance with electricity costs paid by Kela. The reimbursement is payable on electricity bought between 1 November 2022 and 28 February 2023.
The reimbursement for electricity costs is not granted by Kela or the Tax Administration. Instead, electricity companies automatically subtract the amount from the electricity bill.
The retroactive reimbursement for electricity costs has no effect on the tax credit for electricity granted by the Tax Administration Even if you receive reimbursement for electricity costs from your electricity company, you can still get a full tax credit for electricity. In other words, the reimbursement for electricity costs is not deducted from the electricity costs.
The credit is not available if electricity expenses are connected to farming or business
If you have just one electricity meter, measuring the use of electric power both for your agricultural/business activities and for your permanent home that you live in, you must divide the expenses between residential and other uses. Subtract the part serving the agricultural activity from your farm income. Likewise, subtract the part serving a business purpose from your business income. Remaining electricity expenses qualify for the credit as normal.
The above principle is also applied to any other operation for the production of income: for example, if you rent out a room to a tenant, you are not allowed to claim credit for the room’s electricity and account for the same electricity expense as a tax-deductible cost connected to your rental operation.