Thousands of Shekels a Year: Hidden Tax Benefits in Israel
Many Israelis are unaware of tax credits (nekudot zikuy) that can save thousands of shekels annually. In 2026, one credit point is worth 242 shekels per month (2,904 shekels per year). The basic entitlement is 2.25 points, with an additional 0.5 for women. Extra credits are available for parents, discharged soldiers, new immigrants, higher education graduates, and single parents. Credits are cumulative, and overpayments can be refunded for up to six years.
Many Israeli residents miss out on significant income tax savings due to unfamiliarity with the mechanism of 'nekudot zikuy' (tax credit points). In 2026, each credit point is worth 242 shekels per month, or 2,904 shekels per year. Every tax resident is automatically entitled to 2.25 points; women receive an additional 0.5, totaling 2.75. With three points, annual savings reach 8,712 shekels. Additional credits are available for parents (depending on the child's age, from 1 to 4.5 points), discharged soldiers (up to 2 points for 36 months), new immigrants (enhanced credits for 42 months), higher education graduates (1 point for 3 years for a bachelor's degree, 0.5 for 2 years for a master's), as well as single parents and alimony payers (1 point each). All credits are cumulative. If an employee fails to notify their employer in time, they can file a tax refund claim for the past six years.