Hamburg North Tax Office
ELStAM, general information on tax classes and combinations
1. Supplement to the tax classes: Tax class I: Widowed employees also belong to tax class I, with the exception of the year in which the spouse died and the following year (cf. tax class III). Tax class II: If the child is registered...
1. Supplement to the tax classes:
- Tax class I: Widowed employees also belong to tax class I, with the exception of the year in which the spouse died and the following year (cf. tax class III).
- Tax class II: If the child is registered with more than one person, the relief amount is due to the single parent who receives the child benefit. If the employee lives in a marriage-like relationship or in a registered partnership, the relief amount cannot be granted. The same applies if the single parent runs a joint household with another adult for whom he is not entitled to an allowance for children or child benefit. In the assessment period in which spouses or life partners separate, it is possible to claim the relief amount pro rata temporis, provided that the other requirements are met. In the case of permanent separation , the relief amount for single parents can be claimed pro rata temporis from the month in which the spouses/life partners separated. In addition, the employee can claim the relief amount for single parents in the year of marriage/partnership on a pro rata basis, provided that they meet the other requirements, in particular not already living in a household with the future spouse. A widowed employee can claim the relief amount for single parents pro rata for the month of the death of the spouse or life partner.
- Tax class III: The tax class combination III/V must be applied for jointly by the spouses. The change from tax class III or V to tax class IV is possible at the request of only one spouse, with the result that both spouses are classified in tax class IV. Widowed employees are classified in tax class III in the year of the spouse's death and in the following year if both lived in Germany on the day of death and did not live separately permanently.
2. Tax class combinations/selection and income tax deduction for spouses:
If both spouses receive wages, they are generally taxed together because this is usually cheaper. However, when deducting wage tax from an employee, only their own wages can be taken as a basis. The wages of both spouses can only be combined after the end of the year. Only then does the applicable annual tax result. In order to come as close as possible to the annual result, the spouses can choose from the following tax class combinations:
- The tax class combination IV/IV assumes that the spouses earn the same amount.
- The combination of tax classes III/V is designed in such a way that the sum of the tax deductions for both spouses roughly corresponds to the joint annual tax if the spouse classified in tax class III achieves 60% and the spouse classified in tax class V 40% of the joint earned income. As a result, the tax deduction for tax class V is relatively higher than for tax classes III and IV. If the ratio of actual wages does not correspond to the statutory assumption of 60:40, back taxes may be paid. For this reason, there is an obligation to submit an income tax return for tax class combination III/V.
- Instead of tax class combinations III/V, employees can choose the so-called factor method for tax class IV/IV . The factor is a tax-reducing multiplier so that spouses in tax class IV do not withhold more income tax than is absolutely necessary. Here, too, a tax return must be submitted.
If one of the spouses only earns income other than wages (e.g. from a business), the tax class is irrelevant for him. The other spouse can therefore opt for tax class III (or a less favorable tax class). If necessary, the two incomes are then added together in the joint assessment and finally taxed (taking into account the income tax already paid).
The above statements apply accordingly to partners in a registered civil partnership.