(2023) Who is entitled to the grace period / widow's splitting?

In the year following the death of a spouse, there is an option to choose joint assessment with the deceased spouse one more time, provided the conditions for joint assessment were met at the time of death. Gnadensplitting is also known as widow's splitting.

The surviving spouse opts for individual assessment for single persons under § 25 EStG, but the favourable splitting rate is applied as an exception and for the last time (so-called Gnadensplitting under § 32a para. 6 no. 1 EStG). The condition for Gnadensplitting / widow's splitting is that the conditions for spousal taxation were met "at the time of death". This means that both spouses lived in Germany and were not permanently separated.

If you separated from your spouse before their death, this condition would not be met. Joint assessment for the year of death alone is not sufficient for Gnadensplitting (BFH ruling of 27.2.1998, BStBl. 1998 II p. 350; H 184a EStR).

Note: The granting of the splitting rate is intended to prevent a tax disadvantage for the survivor upon the death of a spouse.