Deductions play an important role in determining taxable income in Canton Nidwalden. While gross income provides the starting point, various deductions can significantly reduce the amount subject to federal, cantonal and communal income tax.

This page outlines the main deduction categories under Nidwalden income tax law and how they operate in conjunction with federal rules. The exact amounts, lump-sums and ceilings depend on the tax year and the specific legislation or administrative practice.

Principles of Deductions in Nidwalden

Nidwalden generally follows the standard Swiss approach to deductions. In practice, the system allows:

• Employment-related and professional expenses,
• Mandatory social security and occupational pension contributions,
• Tax-privileged private pension savings (Pillar 3a),
• Insurance premium deductions and, where applicable, interest-related deductions,
• Family-related deductions and social allowances,
• Property-related deductions for homeowners and landlords,
• Extraordinary and unavoidable expenses (e.g. high medical costs).

While many of these categories mirror federal deduction rules, Nidwalden may set its own ceilings, lump-sums and administrative guidelines — especially for deductions related to commuting, property and childcare.

Employment-Related Deductions

Employees in Nidwalden can deduct expenses directly connected with earning employment income. Typically, this includes:

• Professional expenses – usually claimed as a lump-sum based on employment income. Taxpayers may opt to deduct actual documented costs instead when these exceed the lump-sum and are accepted by the tax authorities.
• Commuting expenses – costs for travel between home and the regular workplace. Deductions for public transport are commonly accepted; deductions for private car use are only allowed under limited conditions and may be subject to cantonal caps.
• Other job-related costs – such as mandatory professional memberships, required licences, or job-specific tools and equipment.

Social Security and Occupational Pension Contributions

Contributions to mandatory social insurance and pension schemes are generally fully deductible. This includes:

• AHV/IV/EO contributions,
• ALV (unemployment insurance),
• Mandatory occupational pension contributions (2nd pillar),
• Recognised voluntary 2nd-pillar buy-ins within statutory limits.

These contributions are typically deducted at source and documented on the Swiss salary certificate — the basis for deduction in the tax return.

Private Pension Savings (Pillar 3a)

Contributions to private pension schemes (Pillar 3a) are deductible up to the federal annual maximum. Nidwalden follows the federal framework and does not apply special cantonal restrictions in this regard.

• Standard limit for employees with 2nd pillar coverage,
• Higher limit for self-employed or persons without 2nd pillar pension plan.

Insurance Premiums and Interest on Savings

Nidwalden grants deductions for qualifying insurance premiums (e.g. health, life) and, in certain cases, interest on savings and similar income — all subject to combined federal and cantonal ceilings. The exact allowance depends on marital status, family situation and applicable cantonal provisions.

Family-Related Deductions and Allowances

Taxpayers with dependants benefit from a variety of family-related deductions and social allowances, including:

• Child deductions per dependent child,
• Deductions for dependants requiring support (e.g. elderly relatives),
• Special deductions or allowances for single-parent households.

Deduction amounts depend on cantonal law and may differ from federal or other cantonal allowances.

Childcare Costs

Under certain conditions, childcare costs for children under a certain age may be deductible — particularly when they enable:

• Gainful employment of one or both parents, or
• Education or professional training of the parents.

Typically, deductible childcare requires documented invoices or contracts, and only recognised childcare providers (e.g. nurseries, daycare, after-school care) qualify. Cantonal maximum amounts per child and per year may apply.

Education and Training Costs

Nidwalden generally allows deductions for continuing education and professional training directly related to the taxpayer’s current occupation — for instance:

• Professional development courses,
• Postgraduate or advanced training programmes,
• Specialised seminars that improve existing job-related skills.

Initial education for a first profession is usually not deductible, in line with federal practice.

Property-Related Deductions

Property owners in Nidwalden must declare imputed rental value or rental income. However, they may claim deductions such as:

• Mortgage interest on secured loans,
• Maintenance and repair costs (actual expenses or a canton-defined lump-sum),
• Recognised renovation costs that preserve (not enhance) property value.

Value-enhancing renovations are generally capitalised and not immediately deductible.

Extraordinary Expenses and Medical Costs

Under strict conditions, unavoidable extraordinary expenses may be deductible if they exceed a certain portion of income. These include:

• Unreimbursed high medical or dental expenses,
• Disability-related costs and necessary assistance,
• Support payments to persons in need that go beyond normal living expenses.

Qualifying such expenses requires thorough documentation, and cantonal thresholds apply.

Cross-Cantonal and International Situations

Taxpayers with income or assets outside Nidwalden or abroad may benefit from relief mechanisms in certain cases, such as:

• Double Taxation Agreements (DTAs),
• Unilateral relief schemes for foreign-source income,
• Inter-cantonal allocation rules and exemption-with-progression mechanisms.

While not “deductions” in the narrow sense, these mechanisms may effectively reduce the taxable portion of income or tax burden.

Interaction Between Federal and Cantonal Deductions

Many deduction categories are relevant at both federal and cantonal levels, but:

• Federal and cantonal caps, ceilings or lump-sum amounts may differ,
• Some deductions may exist only at one level,
• Identical expenses may be treated differently in federal vs. cantonal tax calculations.

Documentation and Evidence

To claim deductions reliably in Nidwalden, taxpayers are well advised to keep:

• Salary and pension contribution statements,
• Tickets and invoices for commuting and work-related costs,
• Invoices/contracts for childcare, education, training and insurance,
• Bank and mortgage statements,
• Receipts for medical or other extraordinary costs.

Practical Considerations

The overall impact of deductions in Nidwalden depends on factors such as:

• The type and amount of income,
• The taxpayer’s family and household situation,
• Whether the taxpayer owns property or rents,
• The interaction between federal deduction rules and Nidwalden’s cantonal practice.

This Deductions section should be used in combination with the pages on Rates, Filing Requirements, Special Rules and Examples to get a full picture of the Nidwalden income tax system.