An early withdrawal of funds from an IKZE (individual retirement security account) is one of the most complex tax issues that savers in Poland have to deal with. Under the current rules, every early withdrawal from IKZE creates taxable revenue for the taxpayer, which has to be reported correctly in the right tax return. This particularly affects people who, for various reasons, need to use their savings before reaching retirement age.
It is essential to distinguish properly between a payout (wypłata) and a refund (zwrot) from IKZE, because each has different tax consequences. Settling it incorrectly may result not only in additional tax liabilities but also in sanctions from the tax authorities. That is why every IKZE holder should know the rules for settling early withdrawals in the context of the different forms of business taxation.
IKZE refund versus payout – legal and tax differences
The Act on individual retirement accounts and individual retirement security accounts draws a precise distinction between a refund and a payout from IKZE. Under the rules, a refund means withdrawing all the funds accumulated on the IKZE when the conditions for a payout or a transfer payout are not met. This definition is fundamental to classifying the transaction and its tax consequences correctly.
A refund from IKZE takes place when either party terminates the IKZE agreement and the conditions for a payout or a transfer payout are not met. Leaving the funds in the saver's account after the agreement has expired, when there are no grounds for a regular payout, is also treated as a refund
The refund mechanism also covers situations in which the IKZE agreement has expired and the saver does not meet the conditions for a regular retirement payout. In such cases the remaining funds are treated as a refund, which means the same tax consequences as when the agreement is actively terminated.
A payout from IKZE has a completely different legal and tax character. It applies when the saver meets the conditions set out in the Act: they have reached the age of 65 and made contributions to IKZE in at least 5 calendar years (Article 34a(1)(1) of the IKE and IKZE Act, consolidated text Journal of Laws (Dz.U.) 2026, item 91), or when the payout is made after their death to an entitled person. Unlike a refund, a regular payout from IKZE is not added to income taxed under the tax scale (12% and 32%) – it is subject to a 10% flat-rate tax (Article 30(1)(14) of the PIT Act), withheld by the financial institution.
The practical distinction between a refund and a payout is crucial for taxpayers. While a payout is taxed preferentially (10% flat-rate tax), a refund always creates revenue taxed under the tax scale. This means that ending IKZE savings early can significantly increase your tax burden in a given year.
Tax consequences of an IKZE refund
A refund of funds accumulated on IKZE is revenue classified as revenue from other sources, as defined in the PIT (personal income tax) rules (Article 20(1) of the PIT Act). This type of revenue is taxed under the general rules according to the tax scale, which means it can significantly affect the taxpayer's tax liability in a given year.
The amount received as an IKZE refund is not reduced by the contributions made to the account in previous years. This means that the entire refund is taxable revenue, regardless of how much of their own money the taxpayer paid into IKZE
An important feature of revenue from an IKZE refund is that no tax advances have to be paid during the tax year. The taxpayer therefore does not have to remember monthly settlements, but must remember to report the full amount in the annual tax return filed by the end of April of the year following the tax year. People who combine a business with a job follow the rules described under the annual return for business and employment.
The entity making the IKZE refund must prepare a PIT-11 information form and send it both to the tax office (urząd skarbowy) and to the taxpayer (Article 42a(1) of the PIT Act). This form contains all the data needed to report the revenue correctly in the tax return. Importantly, however, the paying entity does not act as a tax payer (withholding agent) and does not withhold tax advances.
The PIT-11 information must be sent to the tax office by the end of January of the year following the tax year and to the taxpayer by the end of February. On the basis of this information, the taxpayer reports the refund as revenue from other sources in their tax return
The obligation to report revenue from a refund applies to all taxpayers, regardless of whether they previously claimed the tax relief for IKZE contributions. Even if the taxpayer never deducted the contributions from the tax base, the refund received is still revenue taxed under the tax scale.
A partial refund is not possible for IKZE – the Act provides for it only for IKE (Article 2(1)(15a) and Article 37(1a) of the IKE and IKZE Act). An IKZE refund always means withdrawing all the accumulated funds (Article 2(1)(15)), and the entire amount is revenue from other sources, which must be reported in the tax return for the year in which the taxpayer received the funds.
Choosing the right tax return for an IKZE refund
The right tax form for reporting an IKZE refund depends on the form of taxation the taxpayer uses for their business. Revenue from an IKZE refund is always taxed under the tax scale, which is fundamental to choosing the right return.
Taxpayers whose business is taxed under the tax scale can report the IKZE refund in the PIT-36 form, in the section for other sources of revenue. This option is available only to business owners who have chosen the tax scale as the form of taxation for their business.
Business owners taxed at the flat 19% tax (podatek liniowy) or under the flat-rate tax on recorded revenue (ryczałt) cannot report an IKZE refund in PIT-36L or PIT-28. These returns do not allow revenue from other sources to be entered, which means an additional return has to be filed
Taxpayers using the flat tax have to file two separate tax returns. The first is PIT-36L for the business taxed at the flat rate, and the second is PIT-37 for revenue from other sources taxed under the tax scale. We prepare the business PIT-36L return for clients of our bookkeeping services.
The same applies to business owners on ryczałt. They must file PIT-28 for their business and, in addition, PIT-37 to report the IKZE refund. This split results from the different taxation rules for different sources of revenue.
People who do not run a business, as well as business owners on the flat tax or ryczałt (alongside PIT-36L or PIT-28), normally use the PIT-37 form to report an IKZE refund, provided their other income taxed under the scale also comes from information issued by payers or paying entities. This form has a section for other sources of revenue where the amount received should be entered.
Procedure for reporting an IKZE refund in different forms
Reporting an IKZE refund in a tax return requires following specific procedures and deadlines carefully. The basis for a correct settlement is the PIT-11 information received from the entity that refunded the IKZE funds. This document contains all the data needed to complete the relevant section of the tax return. Filling in the form itself is covered in our guide PIT-37 step by step.
In the PIT-36 form, the IKZE refund should be reported in the part for other sources of revenue. The taxpayer enters the gross amount received as a refund, which is then taxed under the tax scale together with the taxpayer's other income. It is important to copy all the data from the PIT-11 information accurately.
Business owners whose business is taxed at the flat rate must file two returns by the end of April of the year following the tax year. PIT-36L covers the business, while PIT-37 is used to report the IKZE refund as revenue from other sources
The PIT-37 form has a dedicated section for revenue from other sources, where the IKZE refund should be reported in detail. The taxpayer enters the revenue amount according to the PIT-11 information received. This section also allows tax-deductible costs to be deducted, if they are provided for the given type of revenue.
Filling in the form requires particular attention to the accuracy of all personal data and amounts. Errors in the return may require filing a correction, which prolongs the settlement and may cause further complications. That is why you should check all the information entered carefully before filing the return.
The deadline for filing a tax return reporting an IKZE refund is normally 30 April of the year following the tax year. Any tax due from the annual settlement must be paid by the same deadline. Late filing or late payment of tax may result in late-payment interest.
- Receive the PIT-11 information from the entity paying the IKZE refund
- Choose the right tax form depending on your form of taxation
- Fill in the section for other sources of revenue
- Check that all the data entered is correct
- File the return by 30 April of the year following the tax year
- Pay the tax due by the deadline stated in the return
Practical aspects of an IKZE refund – no partial refund
A partial refund of funds, known from IKE, does not exist for IKZE: the Act allows it only for IKE (Article 37(1a) of the IKE and IKZE Act). Before the conditions for a payout are met, only all the funds can be withdrawn from IKZE – by terminating the agreement (Article 37(1)) – and the entire refund is revenue from other sources taxed under the tax scale.
There is therefore only one taxation mechanism: the taxpayer receives the PIT-11 information with the refund amount and must report it in the relevant tax return. The amount of tax depends on the taxpayer's total income and the tax brackets applicable in the given year.
An IKZE refund can be particularly unfavourable for tax purposes, because it increases income in a given tax year by the entire accumulated amount at once, which may push the taxpayer into a higher tax bracket. The taxpayer should consider the impact of this transaction on their total tax burden
Business owners must be particularly careful to choose the right form for reporting the refund. The choice of return depends on the form of taxation of the taxpayer's business.
An IKZE refund is often the result of the taxpayer's urgent financial needs. In such situations, it is important to plan funds to cover the additional tax that will arise in the annual settlement. Without such planning, the taxpayer may have trouble paying the tax on time.
Documents relating to an IKZE refund should be kept carefully for the limitation period of the tax liability. The PIT-11 information and a copy of the tax return filed may be needed in the event of a tax audit or if discrepancies in the tax settlements have to be explained.
Impact of an IKZE refund on other tax reliefs and deductions
An IKZE refund, being revenue from other sources, can significantly affect the ability to use various tax reliefs and deductions available in the Polish tax system. Increasing taxable income by the amount of the refund may exceed the income limits set for some tax preferences.
The situation is different with the relief for families with four or more children (ulga dla rodzin 4 plus), which does not depend on family income. It exempts revenue of up to PLN 85,528 a year from employment, contracts of mandate (umowa zlecenia), business activity and maternity benefit (Article 21(1)(153) of the PIT Act). An IKZE refund is not one of these types of revenue – it is not exempt, but it does not reduce the relief limit either. The 800+ child benefit, on the other hand, is not reported in the tax return at all.
An IKZE refund increases the taxpayer's tax base, which may affect the right to tax reliefs that depend on income. The taxpayer should analyse the impact of this transaction on their overall tax settlement before deciding on the refund
The child relief can be lost as a result of the higher income from an IKZE refund only where there is one child. The relief does not decrease gradually, but with one child it is available only if income did not exceed PLN 112,000 (spouses combined) or PLN 56,000 (a person who is not married) – and the income from the refund counts towards this limit (Article 27f(2)(1) and (2a) of the PIT Act). With two or more children, there is no income limit.
Taxpayers using the rehabilitation relief or other health-related deductions should also take the impact of an IKZE refund on their settlement into account. Although these reliefs do not depend directly on income, a higher tax burden may reduce their effectiveness.
Tax planning in connection with an IKZE refund should include an analysis of all available reliefs and deductions. In some cases, postponing the refund to the next tax year may be more beneficial in terms of the total tax burden of the taxpayer and their family.
| Type of relief | Impact of the IKZE refund | Consequences | Recommendations |
|---|---|---|---|
| Relief for families with 4+ children | None – the refund is not covered by the exemption | Relief unchanged, refund taxed under the tax scale | No special action |
| Child relief | Income from the refund counts towards the limit for one child | Possible loss of the relief for one child | Check the PLN 112,000 / 56,000 limit |
| Rehabilitation relief | No direct impact | Reduced effectiveness | Optimise other deductions |
| Health insurance contribution | None – the refund is not part of the contribution base | Contributions unchanged | No special action |
Mistakes in reporting an IKZE refund and their consequences
Reporting an IKZE refund incorrectly can lead to serious tax consequences, including additional liabilities, late-payment interest and liability under the Fiscal Penal Code. The most common mistake is failing to report the refund in the tax return or reporting it in the wrong form.
Business owners often make the mistake of trying to report an IKZE refund in PIT-36L or PIT-28, which do not allow this. As a result, they have to file a correction of the return and an additional PIT-37, which can cause extra costs and complications.
Omitting an IKZE refund from the tax return is a breach of tax obligations, which may result in an additional tax liability being assessed, late-payment interest and liability under the Fiscal Penal Code. The tax office has access to the PIT-11 information and can detect such omissions
Classifying the refund incorrectly as a tax-deductible cost in the business is another common mistake. Contributions paid into IKZE are not treated as tax-deductible costs when the refund is settled – the PIT Act treats the amount received as a refund as revenue (Article 20(1)) and does not provide for reducing it by the contributions made.
Filling in the section for other sources of revenue incorrectly may lead to an incorrect calculation of the tax due. Situations in which the taxpayer does not include all the required data from the PIT-11 information or enters incorrect amounts are particularly problematic.
The consequences of an incorrect settlement can be long-lasting, especially if the tax office opens audit proceedings. In such cases, the taxpayer not only has to correct the errors but may also bear additional costs related to the proceedings and to providing explanations.
A business owner taxed under ryczałt received an IKZE refund of PLN 15,000. He wrongly tried to report this amount in PIT-28, which was not possible. He had to file a correction and an additional PIT-37, which delayed the settlement and meant he had to pay late-payment interest on the additional tax liability.
Tax optimisation when planning an IKZE refund
Planning an IKZE refund should take into account not only current financial needs but also the long-term tax consequences of the decision. The right timing can significantly reduce the tax burden and optimise the taxpayer's overall settlement.
The timing of an IKZE refund is crucial to the amount of tax due. Taxpayers with fluctuating income should consider taking the refund in a year with lower income, which allows them to use the lower tax bracket and reduce the total burden.
Taxpayers planning expenses covered by deductions, for example the thermal modernisation of a single-family house, should consider coordinating the IKZE refund with these expenses. This helps them make better use of the available tax deductions and reduce their effective tax rate
Spreading the refund over several tax years is not possible, because the entire IKZE balance is refunded at once. Taxpayers with high income may, however, consider waiting until they meet the conditions for a payout (age 65 and contributions in at least 5 years) – the payout can then be spread over instalments and is taxed at the 10% flat rate.
Business owners should include the IKZE refund in their tax planning for the year. It may affect decisions on buying fixed assets, using investment reliefs or other tax optimisation options available in the business.
Consulting a tax adviser before taking an IKZE refund can help reduce the tax burden. A professional analysis of the taxpayer's situation makes it possible to choose the best timing and method of settlement, taking into account all available reliefs and deductions.
- Analysis of income in the current and future tax years
- Assessment of the impact on available reliefs and deductions
- Planning other significant tax-relevant expenses
- Considering whether to wait until the payout conditions are met
- Coordination with other business decisions
- Consulting a tax adviser before making a decision
