Increase in the maximum maintenance amount for 2024
Maintenance payments to dependants are deductible as extraordinary burdens of a special nature up to the maximum maintenance amount, without a reasonable burden being deducted (§ 33a para. 1 EStG). This deductible maximum amount is based on the tax-free allowance.
According to the case law of the Federal Constitutional Court (decision of 13.12.1996, 1 BvR 1474/88), compulsory maintenance obligations must be exempt from taxation at least to the extent of the subsistence level. The increase in the tax-free allowance must therefore be applied in parallel to the deduction of maintenance expenses in § 33a para. 1 EStG. In 2023, the maximum maintenance amount is 11.784 Euro.
The maximum maintenance amount is often not granted in this amount, but is reduced. This is by one twelfth for each full calendar month in which the conditions are not met, by the recipient's own income and earnings exceeding the allowance of 624 Euro, and by one, two or three quarters if the maintenance recipient lives in a country with a lower standard of living.
If the maintenance payer also pays contributions to basic health and long-term care insurance for the maintenance recipient, these contributions have been deductible beyond the maximum amount since 2010. It does not matter whether you pay the contributions to the dependant so that they can meet their contribution obligation, or whether you pay the contributions directly to the insurance company via the shortened payment method.
Increase in the maximum maintenance amount for 2024
Maintenance payments: Cash payments for relatives abroad deductible
Many foreign nationals in Germany provide financial support to their family members in their home country. The tax office imposes strict requirements on the proof of maintenance payments and the recipients' need. Transfers via intermediaries or transport companies are generally not recognised (BMF letter dated 7.6.2010).
An exception applies only in special cases, such as crises in the country of residence when no other payment method is possible. In these cases, the identity of the intermediary, the travel itinerary, and precise proof of the money transfer must be fully documented. This includes evidence such as tickets, fuel receipts, border crossing stamps, or flight tickets.
A 2016 ruling by the Baden-Württemberg Finance Court confirmed that maintenance payments to close relatives abroad – in this case to Italy – are tax-deductible. The court accepted the payments after the courier credibly confirmed as a witness that the money transfers were regular and trustworthy (FG Baden-Württemberg dated 21.7.2015, 8 K 3609/13).
In a 2022 decree, the Federal Ministry of Finance clarified the details of the tax deductibility of maintenance payments (BMF letter dated 6.4.2022, IV C 8-S 2285/19/10002 :001 and 10003 :001). The key points are:
- Proof of payments: Maintenance payments must be proven by bank or postal receipts that clearly identify the recipient. If several people in the same household are supported, it is sufficient if the receipts are issued to one person.
- Alternative payment methods: For payments to accounts not in the recipient's name, an additional bank certificate of account authorisation is required.
- Cash payments: These are possible, but strict proof requirements apply. In addition to withdrawal receipts and recipient confirmations, the transfer and the trip, which must not exceed two weeks, must be precisely documented.
- Family trips: Under certain conditions, trips by the taxpayer to their family abroad are tax-deductible. However, this does not apply if the spouse lives in Germany and only children or parents are visited abroad.
- Recipient confirmation: Each money transfer must be confirmed by a receipt issued immediately, containing the name, address, date, place of transfer, and the recipient's signature. Later confirmations are not accepted.
The deductible maintenance amount is up to 11.784 Euro per year (2024), with the recipient's own income over 624 Euro being deducted. In countries with a lower standard of living, the maximum amount is reduced by up to three-quarters.
Important: Maintenance payments can only be considered for tax purposes for the current year. For payments made during the year, the maximum amount is prorated over the year (BFH ruling dated 25.4.2018, VI R 35/16).
Maintenance payments: Cash payments for relatives abroad deductible
Avoid retroactive payments
Retroactive payments are not possible, i.e. an amount transferred in August can only be intended for maintenance in August or the following months. If the support payments do not relate to the entire calendar year but only to individual months, the maximum amount for support payments will be reduced accordingly.
Avoid retroactive payments
Are maintenance payments classed as special expenses or exceptional costs?
Are maintenance payments special expenses or extraordinary expenses?
Maintenance payments to your divorced or permanently separated spouse can be deducted either as special expenses or as extraordinary expenses. This decision applies to the entire maintenance payment, meaning you cannot declare part as special expenses and another part as extraordinary expenses. Which option is more favourable depends on the individual case.
Special expenses:
For higher maintenance payments, it is often advisable to deduct them as special expenses, as the tax savings can be higher. The person obliged to pay maintenance can deduct up to 13,805 Euro annually plus the health and nursing care insurance contributions of the maintenance recipient. However, the recipient must agree and declare the payments as income. The agreement is made via "Form U".
Extraordinary expenses:
The deduction as extraordinary expenses is simpler, as no consent from the ex-partner is required. Here you can deduct up to 11,784 Euro annually plus the health and nursing care insurance contributions paid for the maintenance recipient (as of 2024).
Joint assessment in the year of separation:
In the year of separation, joint assessment is often more tax-efficient. In this case, maintenance payments cannot be deducted in that year.
Are maintenance payments classed as special expenses or exceptional costs?
How can I claim maintenance payments to a person in need?
Maintenance payments to dependants in need can be claimed as extraordinary expenses for tax purposes, without any deductible being applied. It is important to note that the tax office will only recognise these payments if they are proportionate to your net income. After deducting the maintenance payments, your income must be sufficient to support yourself, your partner, and your children. This limit is referred to as the sacrifice limit.
No sacrifice limit for maintenance payments to ex-partners
The sacrifice limit does not apply to maintenance payments to your ex-partner, permanently separated partner, or a dependant with whom you live in a shared household.
Calculation of the sacrifice limit
The sacrifice limit is calculated based on your net income, which includes wages, child benefit, and unemployment benefit, minus taxes, social security contributions, and work-related expenses. For every full 500 Euro of net income, the sacrifice limit is 1 percent. For married couples, the joint income is taken into account. However, a maximum of 50 percent of the net income is recognised. The percentage is reduced by 5 percent per child for whom you receive child benefit, and by 5 percent for the spouse, but by no more than 25 percent.
Example of calculating the sacrifice limit
You are married, have two children, and support your parents with 9.000 Euro per year. Your net income is 24.000 Euro per year.
- Net income: 24.000 Euro
- 1 percent per 500 Euro = 48 percent
- Deduction for spouse: -5 percent
- Deduction for two children: -10 percent
- Remaining sacrifice limit: 33 percent
Your sacrifice limit is therefore 33 percent of 24.000 Euro, i.e. 7.920 Euro. Of the 9.000 Euro maintenance payments, 7.920 Euro are recognised.
Maximum maintenance amount
In 2024, the maximum maintenance amount is 11.784 Euro. This amount can be increased if you also pay health and nursing insurance contributions for the maintenance recipient.
How can I claim maintenance payments to a person in need?
Can I also declare one-off payments?
Occasional or one-off maintenance payments are also tax deductible as part of maintenance payments to dependants.
For a one-off maintenance payment, the tax office always assumes that it is intended to cover maintenance needs until the end of the year. The maximum maintenance amount is then reduced by one twelfth for each preceding month. If you make a payment in September, the maximum maintenance amount will be reduced by 8/12. However, if you make the one-off payment in January, the maximum maintenance amount will not be reduced. A maintenance payment in January thus secures the full maximum maintenance amount for the whole year, provided the supported person is in need for the entire year. The maintenance payment should always cover living expenses until the next payment. It does not matter whether these payments reach the pro rata maximum amount.
Maintenance payments to a spouse can always be deducted up to the maximum maintenance amount, regardless of when the payment is made.
Can I also declare one-off payments?
What is the asset limit for tax-deductible maintenance payments?
If you support a dependent relative, you may be able to claim these payments for tax purposes under certain conditions (§ 33a para. 1 EStG). A key condition is that the person being supported has only limited assets. The asset limit is 15,500 Euro. If the assets exceed this amount, the payments cannot be recognised as extraordinary expenses.
Exempt assets are not considered
Not all assets are taken into account in the calculation. Exempt assets include, among others:
- a reasonable house property occupied by the recipient of the maintenance,
- assets whose sale would be tantamount to a giveaway.
BFH ruling: Important clarification on asset calculation
The Federal Fiscal Court (BFH) confirmed in a recent ruling (29.02.2024, VI R 21/21) that the asset limit of 15,500 Euro still applies. In the case in question, the claimant claimed maintenance payments for his son. The tax office refused recognition because the son's assets were too high.
The case: On 1 January 2019, the son had a bank balance of 15,950 Euro, which included an advance payment of 500 Euro for January 2019. However, the BFH ruled that this advance payment should not be included in the asset calculation as it only became effective for tax purposes in 2019 (§ 11 EStG). This meant the son's assets were actually 15,450 Euro, within the permissible limit.
Asset limit unchanged since 1975
Despite inflation and rising living costs, the BFH sees no need to adjust the asset limit. It is above the tax-free allowance (2019: 9,168 Euro) and allows those in need a certain "nest egg". The ruling also clarifies that monthly maintenance payments are only counted as assets if they have not been used.
Conclusion: In 2024, the harmless asset limit is 15,500 Euro, above the tax-free allowance (2024: 11,784 Euro). Maintenance payments can still be claimed for tax purposes if the assets of the supported person do not exceed this limit. Taxpayers should therefore carefully check whether all conditions are met to successfully assert their claims with the tax office.
What is the asset limit for tax-deductible maintenance payments?
