Switching tax classes to receive more Elterngeld

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Hello All,

 

Question regarding Tax class in Pregnancy

 

- We as a couple have tax class 3 and 5( earning less and would be mother)

 

I read on internet that people change their tax class in early pregnancy to maximise the elterngeld. Is it right??

So i understood following:-

- I tried calculating using elterngeld rechner. For eg if i change to 3 i will get 300- 400 euro netto now and

then x amount more in my elterngeld.But then obviously my husband will pay more taxes.

 

So my question here is :-

- Elterngeld is calculated from your netto??

-Will those extra taxes paid my husband will get us refund later from finanzamt or not?

 

Thanks in Advance!!

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I read on internet that people change their tax class in early pregnancy to maximise the elterngeld. Is it right??

 

Yes, but you have nearly no chance of getting that change through in time.

 

Since 1. January 2013, you have to apply for the tax class change at least 7 months before the start of your Mutterschutz. Since the apoplication is only valid from the next month, this then means that you need to have 6 months in the new tax class before you enter Mutterschutz. Mutterschutz starts 6 weeks before your calculated birth date.

 

So you would need to know 8.5 months (= 7 months + 6 weeks) before the birth that you are pregnant in order to fulfill these deadlines.

 

 

- Elterngeld is calculated from your netto??

 

Yes.

 

 



  • net less than 300€ --> Elterngeld 300€
  • 300€ < net < 340€ --> Elterngeld is your net salary, i.e. 100% of your net
  • 340€ < net < 1,000€ --> Eltergeld between 100% and 67% of your net, on a sliding scale
  • 1,000€ < net < 1,240€ --> Eltergeld between 67% and 65% of your net, on a sliding scale
  • 1,240€ < net < 2,769.23€ --> 65% of your net
  • net > 2,769.23€ --> Elterngeld = 1,800€

 

 

 

-Will those extra taxes paid my husband will get us refund later from finanzamt or not?

 

It doesn't matter whether you have tax class 5 and your husband tax class 3, or the other way around: what you pay during the year is just a pre-payment. The final tax burden will only be calculated in the tax return that you will have to do before 31. May 2015 for the calendar year 2014.

Instructions in the yellow section of the TT Elster wiki.

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Thanks Panda Munich for a quick reply!! You are just awesome!!

 

Although i am still eligible for change but i think it does not help any way. Because my husband will be paying more taxes, so we will come to more or less same.

 

But just wondering, how they calculate or consider my salary in elternzeit.Since i will be getting 65 % of my salary. Will my salary slip reflect all other contributions as well like pension, income tax etc? Who pays for those contributions??

 

I know that final tax will be calculated based on our both earning and total tax paid.That means they consider my 65% salary (as normal salary) and my husband 100% salary and calculate taxes accordingly. Isnt it??

 

Thanks Again!!

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Because my husband will be paying more taxes, so we will come to more or less same.

 

No, you didn't understand.

 

Let's do an example.

 

yearly gross salary husband: 40,000€ (taxable income: 33,176€)

yearly gross salary wife: 30,000€ (taxable income: 24,623€)

--> total family taxable income: 33,176€ + 24,623€ = 57,799€

 

Before the tax class change:

amounts calculated with the Parmentier wage tax calculator

 

tax husband, tax class 3: 3,671.40€

tax wife, tax class 5: 7,551.69€

--> total tax pre-paid: 3,671.40€ + 7,551.69€ = 11,223.09€

 

--> tax calculated in tax return, just enter the total family taxable income 57799 into the Parmentier income tax calculator and look at the column "couples": 11,001.54€

 

Tax refund = tax pre-paid - real tax due = 11,223.09€ - 11,001.54€ = 221.55€

 

**************************************

 

After the tax class change:

amounts calculated with the Parmentier wage tax calculator

 

tax husband, tax class 5: 11,325.42€

tax wife, tax class 3: 1,360€

--> total tax pre-paid: 11.325,42€ + 1,360€ = 12,685.42€

 

--> tax calculated in tax return, just enter the total family taxable income 57799 into the Parmentier income tax calculator and look at the column "couples": 11,001.54€

 

Tax refund = tax pre-paid - real tax due = 12,685.42€ - 11,001.54€ = 1,683.88€

 

 

But just wondering, how they calculate or consider my salary in elternzeit.Since i will be getting 65 % of my salary. Will my salary slip reflect all other contributions as well like pension, income tax etc? Who pays for those contributions??

 

During your Elternzeit, the state pays for your public pension, unemployment and public health insurance.

 

You won't get a salary slip, but simply 65% of your former net in your bank account (if you are in the 65% bracket).

 

 

I know that final tax will be calculated based on our both earning and total tax paid.That means they consider my 65% salary (as normal salary) and my husband 100% salary and calculate taxes accordingly. Isnt it??

 

Elterngeld is not taxed itself, but it does raise the tax rate that your husband has to pay on his salary, this is called progression (= Progressionsvorbehalt)

 

Example:

 

yearly gross salary husband: 40,000

your yearly Elterngeld: 12*1,500€ = 18,000€

 

--> enter into this official progression calculator:

 

mark: Splittingtarif

Zu versteuerndes Einkommen in Euro: 40000

Dem Progressionsvorbehalt unterliegende Ersatzleistungen und Einkünfte in Euro: 18000

 

click on "Einkommensteuer berechnen"

 

--> income tax 7,234€

+ 5.5% of income tax for solidarity tax: 0.055*7234 = 397,87€

_______________________________

--> total tax = 7,631.87€

 

If you husband changes into tax class III again at the start of your Elterngeld, then he prepaid for that year 3,671.40€ (see above) in tax

--> he has to pay additional tax after the tax return of: 7,631.87 - 3,671.40€ = 3,960.47€

 

So even if they officially say the Elterngeld doesn't get taxed, in the end you do pay extra tax because of it.

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I know this is an old thread, but is still advantageous to switch tax classes ahead of time if one is trying to get pregnant? (In particular, if the parent who earns less is the one who is going to be taking Elternzeit.) If so, does one have to give a reason, or can you just request a change?

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Yes, it's advantageous to change it 12 months before because the Elterngeld is calculated according to the last 12 months of the NETTO (what you receive after taxes) income.

 

You don't need to give them any reason and as far as I know you can change the Steuerklasse once every year.

 

To change your German Steuerklasse, you just have to fill out an application form called "Antrag auf Lohnsteuerklassenwechsel". It would be the easiest way to just drop by in person at your local tax office (Finanzamt) and say that you want to change your Steuerklasse.

 

Cheers,

SNooPI

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8 hours ago, captious said:

I know this is an old thread, but is still advantageous to switch tax classes ahead of time if one is trying to get pregnant? (In particular, if the parent who earns less is the one who is going to be taking Elternzeit.) If so, does one have to give a reason, or can you just request a change?

We did this with no problem. You request a change at your Finanzamt, and the Finanzamt will inform both of your companies. After you receive Elterngeld, change back your tax classes the same way as before. 

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if husband and wife both have tax class 4, and wife gets pregnant, goes into Mutterschutz (6 weeks prior to expected DOB), then has the child and begins Elternzeit, is there any mid-long term benefits to change tax classes to 3 (husband) and 5 (wife) whilst the mother is on elternzeit, which could be up to 2 years?

Or will the monthly tax savings the husband makes on SK3 during the wife's elternzeit effectively be reeled back in at tax time by the finanzamt (Rückzahlung)?

 

Or to put it plainly: the mrs is now about 6 months pregnant and planning to take 2yrs of Elternzeit after the birth. Currently we're both on SK4 (yes, it would have been beneficial to have her change to SK3 about 6 months ago, but we missed that boat). Is it now beneficial to change to a 3/5 tax class around the time of birth so that I can pay less tax during those 2 years of EZ?

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41 minutes ago, barry2104 said:

Or will the monthly tax savings the husband makes on SK3 during the wife's elternzeit effectively be reeled back in at tax time by the finanzamt (Rückzahlung)?

 

Yes.

Though you have to take into account that your wife's Elterngeld is lower than her previous taxable salary, so even if you earned nearly the same before, you may now be nearer the case for the class combo 3/5, that one spouse earns much more than the other, so the Rückzahlung would be small.

And after her Elterngeld stops, you're the classic case for 3/5, an earning spouse and a non-earning spouse, no Rückzahlung at all.

 

By the way, since you're getting Elterngeld, you have to file a tax return anyway, even if you remain in 4/4: http://www.finanztip.de/steuererklaerung-abgabepflicht/

 

41 minutes ago, barry2104 said:

Is it now beneficial to change to a 3/5 tax class around the time of birth so that I can pay less tax during those 2 years of EZ?

 

If your own job is at risk you should always choose tax class 3, to ensure that your later unemployment benefit (= Arbeitslosengeld I) will be the maximum possible, details in:

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sorry to pull up an old thread but i didn't want to start a new one...

My wife is in currently in Elternzeit (from summer 2018 for 1 year) and is also getting Elterngeld during this time. Until now we were (are) a 4/4 tax class. We have just decided to extend her Elternzeit a further 1 year, so that she won't be working at all in 2019, and only have "income" from Elterngeld for the first half of 2019.

Is it worth us changing tax classes (just) for the calendar year 2019? Or has that ship already sailed (I read it's only possible to change tax classes up to 30th November?)?

Or would it not make a difference for us overall bzw. would my higher (Tax class 3) nett earnings in 2019 be equivalent to the amount of tax I would get back if I was to stay in TC4?

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12 minutes ago, barry2104 said:

Or would it not make a difference for us overall bzw. would my higher (Tax class 3) nett earnings in 2019 be equivalent to the amount of tax I would get back if I was to stay in TC4?

Barring any other circumstances, yes. The tax classes are only to estimate your total tax bill, but it all comes out in the wash when you file your return.

 

That's been my experience, anyway.

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Hello Friends,

Sorry to ask again. I found this very confusing. I moved to Germany on last year and i am expecting my second child on February 2020. In my case,  i am the expecting mother who is earning more compared to my husband. I am in tax class 3 and my husband is in tax class 5 currently. Does it make sense to switch the tax class now as i will be on  Mutterschutz  from January 1st week. I am planning to come back to work after 1 year.

 

Thanks & Best regards,

Jiss

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27 minutes ago, Jiss said:

Does it make sense to switch the tax class now as i will be on  Mutterschutz  from January 1st week.

 

One of our resident tax experts may have deeper insight and will correct us where we're wrong, but as already mentioned right above you, I agree that it tends to all balance out after your tax return. The state has in mind what a fair amount of Elterngeld is. Do not doubt that if they determine you were given "too much" beforehand, it will be factored in to your tax burden algorithm afterwards. It depends on your income and taxable particulars, but there is a cap on Elterngeld. So multi-millionaires are not getting disgustingly (...much) more than a single-income family where the parent alone works a low-wage job.

 

For the state unemployment benefit (Arbeitslosengeld 1), again as mentioned above, I could understand how it could make a difference, since that figure is based on previous years' average income.

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Bear in mind that only one tax class is applicable for the whole year!

 

So if you change before the end of December, then when you do you take return for 2019 then this will then be applied to your earnings for the whole of 2019.  Which could well mean that you end up with a tax bill and your husband with a rebate.  Uou would have to calculate it, but I would assume that this means that you will be worse off as a family.

 

So although I am not a tax expert, I doubt that it would make sense to change it this year.

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