If the expenses for the instructor activity exceed the income…

Part-time activities as a trainer, instructor, educator, carer, nurse, and artist are tax and social security-free up to 3.000 Euro per year. The tax-free maximum amount is not very generous, but many clubs cannot even pay this amount.

It is therefore not surprising that the role of a trainer is carried out with great idealism and commitment, and often involves personal expenses that exceed the income. The question then arises as to whether this loss from part-time work can at least be offset against other income for tax purposes.

So far, tax offices have rejected the recognition of losses from part-time work, arguing that the expenses are related to tax-free income and are therefore not deductible (according to § 3c EStG). Expenses are only recognised if they exceed the tax-free income. In this case, both the income and the expenses must exceed the allowance of 3.000 Euro (until 2020: 2.400 Euro) (e.g. OFD Frankfurt dated 28.12.2015, S 2245 A-2-St 213).

The Federal Fiscal Court has ruled that losses from part-time training activities can be deducted even if the income does not exceed the allowance of 3,000 Euro. However, the prerequisite for the consideration of the loss is that the activity is carried out with the intention of making a profit and is therefore not a so-called hobby (BFH ruling of 20.11.2018, VIII R 17/16).

The case: A trainer earns tax-free income of 108 Euro and has expenses of 608 Euro. He claims the difference of 500 Euro as a loss from self-employment. However, the tax office does not take the loss into account. The official argues that business expenses or income-related expenses from the trainer activity can only be taken into account for tax purposes if both the income and the expenses exceed the trainer allowance.

According to the BFH judges, a trainer who earns tax-free income below the trainer allowance can claim the related expenses for tax purposes if they exceed the income. Otherwise, the tax advantage intended by the legislator for part-time trainers would turn into a tax disadvantage. However, the training activity must be carried out with the intention of making a profit. If there is no intention to make a profit, the losses would not be taken into account for tax purposes.

Currently, the Regional Finance Directorate Frankfurt am Main and the Bavarian State Tax Office have commented on questions regarding part-time work. The OFD Frankfurt lists many individual cases and assesses them for tax purposes, such as doctors in disability or corona sports, holiday carers, rescue workers, or city and museum guides. It also deals with the tax classification of on-call services or purely organisational work in the non-profit sector.

The Bavarian State Tax Office, on the other hand, first presents the principles for the tax exemption of part-time work, such as their maximum duration: In relation to the calendar year, the activity must not exceed one-third of the working hours of a comparable full-time job. The one-third limit is met on a flat-rate basis with a regular weekly working time of 14 hours (1/3 of 42 hours).

Here are the instructions:

• OFD Frankfurt, Rundvfg. dated 2.9.2019, S 2245 A-002-St 29
• Brochure of the Bavarian State Tax Office

If you incur expenses in connection with a subsidised part-time job in a year without receiving any corresponding income, you can still claim these as pre-emptive income-related expenses or business expenses upon proof (BFH ruling of 6.7.2005, BStBl. 2006 II p. 163). The tax authorities accept this decision (OFD Frankfurt dated 28.12.2015, S 2245 A-2-St 213).

(2022): If the expenses for the instructor activity exceed the income…

Which tax-free expense allowances do I need to declare?

If you have received tax-free expense allowances, please enter them here. This includes allowances received from public funds, a federal or state fund.

Employees often receive a tax-free expense allowance from a part-time job. This could be a role as an instructor, educator, trainer in the sports sector or as an artist such as a choir director or musician, and also as a carer for sick, elderly or disabled people. It must be an educational or caregiving role.

Payments for such a privileged part-time role are tax and social security-free up to 3,000 Euro (until 2020: 2,400 Euro). The condition for the tax benefit is that the role is part-time, carried out for a charitable organisation or a legal entity under public law, and serves charitable, benevolent or religious purposes.

The allowance of 3,000 Euro is granted per person only once, even if you have several eligible roles. It is therefore personal and not job-related. The allowance is an annual amount. Therefore, payments up to the maximum amount remain tax-free even if you do not carry out the eligible role for the entire year.

As a supporter of such an organisation, you can receive part or all of your expense allowance tax-free. Any amounts exceeding the allowance of 3,000 Euro must be taxed. If your expense allowance is less than 3,000 Euro, you can only claim the lower amount.

Ms Meier teaches at a music school and receives 2,800 Euro annually for this. She also supervises a gymnastics group at the primary school and receives another 400 Euro per year for this. Both roles are tax-privileged under § 3 No. 26 EStG, but only up to a total of 3,000 Euro. Ms Meier must tax the remaining 200 Euro.

(2022): Which tax-free expense allowances do I need to declare?

Who can claim the trainer's allowance?

Those who wish to benefit from the so-called trainer allowance do not necessarily have to be involved as a trainer in a sports club. The allowance can also be claimed for the following activities:

• Training manager, instructor, educator, supervisor or similar activities
• artistic activities
• care of disabled, sick or elderly people

The trainer allowance is subject to the following conditions:

• The activity must be carried out in the service or on behalf of a public or public-law institution, a non-profit association, a church or similar organisation promoting charitable, benevolent or ecclesiastical purposes.
• The activity must not be carried out as a main occupation. An activity is considered part-time if it does not take up more than one-third of a comparable full-time job.
• Each person can earn up to 3,000 Euro per year tax and social security-free. Only the part of the part-time income exceeding this allowance must be taxed.

Eligible activities include, for example:

• working as a sports trainer or team supervisor,
• a choir leader or orchestra conductor,
• teaching and lecturing in the context of general education and training,
• support services provided by outpatient care services (R 3.26 para. 1 LStR),
• immediate measures for seriously ill and injured persons, e.g. by paramedics and first aiders (R 3.26 para. 1 LStR),
• transport for disabled persons.

Part-time activities in the private sector, for trade unions or political parties are not exempt from tax, as there is no "eligible client".

The COVID-19 vaccination is a major task. Therefore, there should be a tax benefit for those who volunteer in vaccination or test centres or mobile vaccination teams. The dedicated helpers make an important contribution to health protection and combating the pandemic.

Already in 2020 and 2021, volunteers in vaccination and test centres could benefit from the so-called trainer or volunteer allowance. CURRENTLY, the finance ministries of the federal states and the Federal Ministry of Finance have decided to extend these reliefs for the year 2022 (source: Ministry of Finance Baden-Württemberg, announcement of 7.2.2022). For the years 2020 to 2022, the following regulations apply:

• For all those directly involved in vaccination or testing - i.e. in information sessions or in the vaccination or testing itself - the trainer allowance applies. In 2020, the trainer allowance was 2,400 Euro, since 2021 it has been 3,000 Euro per year. Those involved in the administration and organisation of vaccination or test centres can claim the volunteer allowance. This was 720 Euro in 2020 and increased to 840 Euro from 2021. This also applies to mobile vaccination and test centres.
• Due to tax regulations, volunteers in test centres can only claim the trainer or volunteer allowance if the client or employer is a non-profit organisation or a public employer, such as the state or a municipality.
• For vaccination centres, the federal and state governments have agreed that the trainer and volunteer allowance can also be considered if the vaccination centre is operated on behalf of a legal entity under public law with the involvement of private individuals or entirely by private individuals.
• Both the trainer and volunteer allowances only apply to remuneration for part-time activities. This is usually the case if these activities do not take up more than one-third of the working hours of a comparable full-time position or the regular weekly working hours do not exceed 14 hours. This also applies to helpers who do not have a main occupation, such as students or pensioners.
• The allowances are annual amounts granted to volunteers only once per calendar year. If there are several activities for which the trainer allowance applies (e.g. helper in the vaccination area and trainer of a youth team), the income must be added together. The same applies to the volunteer allowance.
• If volunteers are employed part-time in both the vaccination/testing area and the administration/organisation of the vaccination and test centres, both allowances can be considered simultaneously. However, this requires that the activities are agreed upon and remunerated separately.

Notes:

Doctors' surgeries are not considered COVID-19 vaccination centres in this sense. If doctors pay employees a bonus for the additional work, the trainer or volunteer allowance cannot be claimed.

Part-time helpers are generally considered employees and therefore earn income from employment. The occasionally held view that self-employed income could be involved is not shared by the tax authorities, as far as can be seen. The allowances of 3,000 Euro or 840 Euro can also be taken into account by the employer when calculating the wage tax. In this case, however, the employee must confirm in writing to the employer that the respective allowance has not already been "used up" elsewhere. The employer must keep the declaration in the payroll account.

If pharmaceutical staff were employed in the vaccination centres and received their remuneration from the pharmacy chamber, no wage tax was usually deducted in 2021, as there appear to be special agreements between the tax authorities and pharmacy chambers. The income must then be declared and taxed in the employee's tax return. Caution: From 2022, this leniency rule is no longer expected to apply, meaning wage tax must also be deducted for pharmaceutical staff if the tax-free allowances are exceeded.

(2022): Who can claim the trainer's allowance?

Who receives the allowance for voluntary service?

The so-called voluntary service allowance under § 3 No. 26a EStG of a total of 840 Euro per year is subject to the following conditions:

• The activity must be carried out in the service or on behalf of a legal entity under public law, based in the European Union or the European Economic Area (e.g. federal government, states, municipalities, certain religious communities) or a tax-privileged institution and must be in the charitable, benevolent or ecclesiastical sector.
• The voluntary activity must be part-time. This means that the actual time spent must not exceed one-third of the working hours of a comparable full-time job. With a regular weekly working time of up to 14 hours, it can therefore be assumed to be part-time. People who do not have a main occupation, such as housewives and househusbands, students, pensioners or unemployed persons, can also work part-time.

A significant difference from the tax exemption under § 3 No. 26 EStG ("trainer allowance") is that the voluntary service allowance does not limit certain activities. It can be claimed for any type of activity for charitable associations, church or public institutions.

The tax exemption also applies if you receive income for an activity

• as a treasurer in a club,
• for providing transport for parents to away games for children, or
• for serving as a board member,
• as cleaning staff,
• as a groundskeeper, or
• as a voluntary referee in amateur sports

A club or corporation must observe the following: Payments to members must not be unreasonably high; that is, they must not be higher than payments to non-members. If the board receives remuneration beyond mere reimbursement of expenses, the articles of association must explicitly permit payment.

The COVID-19 vaccination is a major task. Therefore, there should be a tax benefit for those who volunteer in vaccination or test centres or mobile vaccination teams. The dedicated helpers make an important contribution to health protection and combating the pandemic.

Already in 2020 and 2021, volunteers in vaccination and test centres could benefit from the so-called trainer or voluntary service allowance. CURRENTLY, the finance ministries of the states and the Federal Ministry of Finance have decided to extend these reliefs for 2022 (source: Ministry of Finance Baden-Württemberg, announcement of 7.2.2022). For the years 2020 to 2022, the following regulations apply:

• For all those directly involved in vaccination or testing - i.e. in information sessions or in the vaccination or testing itself - the trainer allowance applies. In 2020, the trainer allowance was 2,400 Euro, since 2021 it has been 3,000 Euro annually. Those involved in the administration and organisation of vaccination or test centres can claim the voluntary service allowance. This was 720 Euro in 2020 and increased to 840 Euro from 2021. This also applies to mobile vaccination and test centres.
• Due to tax regulations, volunteers in test centres can only claim the trainer or voluntary service allowance if the client or employer is a charitable institution or a public employer, such as the state or a municipality.
• For vaccination centres, the federal and state governments have agreed that the trainer and voluntary service allowance can also be considered if the vaccination centre is operated on behalf of a legal entity under public law with the involvement of private individuals or entirely by private individuals.
• Both the trainer and voluntary service allowances only apply to remuneration for part-time activities. This is usually the case if these activities do not take up more than one-third of the working hours of a comparable full-time position or the regular weekly working time does not exceed 14 hours. Part-time work can also be done by those who do not have a main occupation, such as students or pensioners.
• The allowances are annual amounts granted to volunteers only once per calendar year. For multiple activities for which the trainer allowance applies (e.g. helper in the vaccination area and trainer of a youth team), the income must be added together. The same applies to the voluntary service allowance.
• If volunteers work part-time in both the vaccination/testing area and the administration/organisation of vaccination and test centres, both allowances can be considered. However, this requires that the activities are agreed upon and remunerated separately.

Notes:

Doctors' surgeries are not COVID-19 vaccination centres in this sense. If doctors pay employees a bonus for the additional work, the trainer or voluntary service allowance cannot be claimed.

Part-time helpers are usually considered employees and therefore earn income from employment. The occasionally held view that self-employed income could be involved is not shared by the tax authorities - as far as can be seen. The allowances of 3,000 Euro or 840 Euro can also be taken into account by the employer when calculating income tax. In this case, however, the employee must confirm in writing to the employer that the respective allowance has not already been "used up" elsewhere. The employer must keep the declaration in the payroll account.

If pharmaceutical staff were employed in the vaccination centres and received their remuneration from the pharmacy chamber, no income tax was usually deducted in 2021, as there appear to be special leniency agreements between the tax authorities and pharmacy chambers. The income must then be declared and taxed in the respective employee's tax return. Caution: From 2022, this leniency regulation is no longer to apply, meaning that income tax must also be paid for pharmaceutical staff if the tax-free allowances are exceeded.

(2022): Who receives the allowance for voluntary service?

Can I also claim trainer allowances for multiple activities?

Yes. For example, if you work as a coach for two different clubs, you can receive the allowances from both clubs tax-free, provided the allowance of 3,000 Euro is not exceeded. Simply enter the sum of the two allowances in your tax return. Any amount exceeding the maximum must be taxed.

If you have different roles, one self-employed and the other employed, you must allocate this amount to one type of income in your tax return: either self-employed or employed. In this case, you only receive the trainer's allowance once in total.

(2022): Can I also claim trainer allowances for multiple activities?

Can additional expenses be claimed alongside the trainer's allowance?

The current allowance for trainers, coaches, etc. is 3.000 Euro. This means that income in the area of voluntary civic engagement remains tax and social security free up to an amount of 3.000 Euro. However, expenses up to 3.000 Euro cannot be claimed additionally.

Income exceeding 3.000 Euro is taxable. However, expenses or business expenses can then be taken into account, but only if they have not been reimbursed tax-free.

(2022): Can additional expenses be claimed alongside the trainer's allowance?

Is it possible to receive a tax reduction for activities not covered by the trainer's allowance?

Yes. The trainer's allowance is only available for educational and caregiving activities.

However, there are other activities that can receive tax benefits if you are volunteering. If you work for a non-profit association or a public corporation, you can receive up to 840 Euro (until 2002: 720 Euro) tax-free without meeting the requirements for the trainer's allowance.

Thus, practically any expense allowance for charitable work is tax-free up to 840 Euro. However, an important condition must be met: you must work part-time for the charitable institution.

Examples of activities eligible for the 840 Euro tax reduction (BMF letter dated 21.11.2014):

• Club board, treasurer, cashier, secretary.
• Groundskeeper, hall manager, equipment manager, music librarian, fire equipment manager.
• Supervisors.
• Office staff, cleaning staff.
• Parents driving their children to football matches.
• Refereeing in amateur sports.
• Volunteers at welfare organisations.
• Volunteers in church activities.
• Care and training of animals, e.g. racehorses and service dogs.
• Animal carers in an animal shelter.
• Supervisory duties in a swimming pool.
• Church board.
• Patient advocates in hospitals.

(2022): Is it possible to receive a tax reduction for activities not covered by the trainer's allowance?