Tax return for 2022: What's new

Submission deadline for the 2022 tax return

You are obliged to submit an income tax return if there is a specific reason. This is known as a mandatory assessment or official assessment.

If there is no reason for a mandatory assessment, employees, occupational pensioners and retirees can voluntarily submit a tax return (so-called application assessment in accordance with § 46 para. 2 no. 8 EStG). In this case, you have up to four years after the tax year to submit, for the 2022 tax return, until 31.12.2026 (§ 169 AO).

The following deadlines apply for submission:

Late submission penalty

Since 2019, new rules for imposing late submission penalties have been in effect, first applicable to the 2018 tax return. In addition to the previously unchanged "may rule", a "must rule" and a minimum late submission penalty have been introduced (§ 152 AO, amended by the "Act to Modernise Taxation Procedures" of 18.7.2016).

Lower tax interest rates retroactively from 1.1.2019

Retroactively from 1.1.2019, the interest rate for tax arrears and refunds was reduced to 0.15% per month, i.e. 1.8% per year.

The new interest rate for arrears and refund interest under § 233a AO is based on the current base rate under § 247 BGB (- 0.88% p.a.) with an appropriate surcharge of around 2.7 percentage points. The interest rate is to be reviewed at least every three years and adjusted for subsequent interest periods.

Obligation to submit if receiving short-time work benefits

In response to the Corona crisis, the regulations regarding the receipt of short-time work benefits were changed several times. The duration for receiving short-time work benefits was extended to up to 24 months. There are also special regulations for the tax treatment of employer subsidies for short-time work benefits and seasonal short-time work benefits. But what do these regulations mean for the tax return?

Individuals who receive more than 410 Euro in short-time work benefits in the calendar year are obliged to submit a tax return. Those who do not submit the return "voluntarily" should be aware that the tax offices receive information about the receipt of short-time work benefits via data exchange, may request the tax return after one or two years, and significant late submission penalties may apply.

Supplementary amounts are also subject to the progression clause (§ 32b para. 1 no. 1g EStG). The employer must enter them in the electronic payslip (for the calendar year 2020) under number 15.

Tax relief: Increase in basic allowance

The tax basic allowance ensures that the portion of income absolutely necessary for living expenses is not taxed (minimum subsistence level). On 1.1.2023, the basic allowance was increased from 10.347 Euro to 10.908 Euro. A further increase to 11.604 Euro is expected on 1.1.2024 (§ 32a EStG).

Reduction of fiscal drag

To offset fiscal drag and prevent a creeping tax increase, the key values of the 2022 tax rate are increased by the estimated inflation rate, i.e. "shifted to the right", by 1.17 percent (2021:1.52 percent).

This adjustment means that rising tax rates of the progressive tax rate apply only at slightly higher income levels, leaving more net income. Without this adjustment, taxpayers whose income only increases by the inflation rate would pay more tax on average and have less net purchasing power.

The new income tax rate 2022

Wealth tax applies only at higher income

Since 2007, there has been the so-called wealth tax, a tax surcharge of 3 percentage points for top earners. The top tax rate is therefore 45% in the highest proportional zone and applies to taxable income from 2019 of 265.327 Euro or 530.653 Euro (single / married).

In 2021, the highest proportional zone with the tax surcharge of 3 percent begins at a taxable income of 274.613 Euro for singles and 549.225 Euro for married couples. From 2022, the highest proportional zone begins at a taxable income of 277.826 Euro or 555.651 Euro.

Family support: Increase in child benefit and child allowance

Child benefit was last increased in 2021. Already for 2022, the child allowance was retrospectively increased from 2.730 Euro to 2.810 Euro per parent. The education allowance (allowance for care and education or training) remains at 1.464 Euro per parent as in 2021. Further increases in the child allowance are planned for 1.1.2023 and 1.1.2024 ("Inflation Compensation Act").

To provide special support for families, child benefit will be increased to 250 Euro per month for the first three children from 2023. The increase is to take effect from 1 January 2023. For the first and second child, this means an increase of 31 Euro per month, for the third child an increase of 25 Euro per month. In the long term, child benefit in Germany is to be replaced by a basic child allowance, which would bundle various family benefits.

Current: With the "Tax Relief Act 2022", a one-off child bonus of 100 Euro was paid in July 2022 in addition to child benefit for each child.

Relief amount for single parents

Since 2004, single parents have been entitled to a relief amount if at least one child for whom they receive child benefit or the tax child allowance belongs to their household, and no other adult lives in the household (§ 24b EStG). The aim of the relief amount is to compensate for the higher costs of living and running a household for "genuinely" single parents who share a household only with their children and no other adult who actually or financially contributes to the household.

Since 2020, the relief amount for single parents has been permanently increased to 4.008 Euro. The increase of 240 Euro for each additional child remains unchanged (§ 24b para. 2 sentence 3 EStG, amended by the "Second Corona Tax Assistance Act").

Energy price allowance (EPP) for employees and mini-jobbers

The energy price allowance of 300 Euro should have already been paid out in September 2022 via the employer's payroll. Employees who are not employed in September 2022 can receive the EPP by submitting an income tax return.

If a tax return is submitted and the eligibility requirements for the energy price allowance are met, the EPP will be automatically set with the 2022 income tax assessment. No special application is required. This also applies to all mini-jobbers whose employers did not pay the EPP with their wages.

Mini-job limit rises to 520 Euro

On 1.10.2022, the statutory minimum wage was increased to 12 Euro per hour. Accordingly, the earnings limit for mini-jobs was raised from 450 Euro to 520 Euro. A mini-jobber may therefore earn 6.240 Euro over 12 months and in justified exceptional cases up to 7.280 Euro per year.

Employee allowance increases to 1.200 Euro

With the "Tax Relief Act 2022", the employee allowance was increased retroactively from 1.1.2022 from 1.000 Euro to 1.200 Euro (§ 9a no. 1 EStG). If you do not claim individual work-related expenses, an amount of 1.200 Euro will be assumed without proof from 2022.

Increase in travel allowance for long-distance commuters

The allowance for long-distance commuters has been increased again, to 38 cents from the 21st kilometre. For the first 20 km, it remains unchanged at 30 cents. This applies retroactively from 1.1.2022. Originally, the increase was to apply from 2024, but it has now been brought forward. The increase is initially limited until 31.12.2026.

Home office allowance tax deductible

Employees who work from home and whose workplace does not meet the tax requirements for a home office can claim a flat rate of 5 Euro per day as work-related expenses. The home office allowance is limited to a maximum of 600 Euro per year.

Important: Although the tax offices are instructed not to request employer certificates for the number of home working days, those who claim high travel expenses for commuting despite the allowance should expect enquiries from their tax office.

Increase in meal allowances

Since 1.1.2020, the meal allowances have been increased (§ 9 para. 4a sentence 3 EStG, amended by the "Act on Further Tax Promotion of Electromobility and Amendment of Other Tax Regulations" of 12.12.2019).

Work-related relocation: Increase in allowances

If you move for work-related reasons, you can deduct the moving costs as work-related expenses or have them reimbursed tax-free by your employer. These include transport costs, travel expenses, double rent payments, estate agent fees for a rented flat and other moving expenses. While the first-mentioned costs can be deducted in the proven amount, other moving expenses can be claimed with a flat rate.

If the children have difficulties at school as a result of the move, you can deduct "expenses for additional tuition for the children" up to a certain maximum amount as work-related expenses (§ 9 para. 2 BUKG 2019).

Pension from statutory pension insurance

For pensioners who received a pension for the first time in 2022, the taxable portion is 82% of the pension amount. The gross pension amount is 82% taxable, with a work-related expenses allowance of 102 Euro deducted.

In the following year 2022, the full annual amount of the pension will again be taxed at the taxable rate of 80%. The remaining portion of the pension is then your personal pension allowance, which will apply in the same amount for the entire duration of the pension. From 2023, the full annual pension amount will be taxable after deduction of the pension allowance and the work-related expenses allowance of 102 Euro.

Pensions and occupational pensions

Remuneration is - unlike pensions from statutory pension insurance - fully taxable as "income from employment" and must therefore be declared in "Anlage N". Remuneration has been subject to the pension allowance, the supplement to the pension allowance and the work-related expenses allowance of 102 Euro since 2005.

If you retire in 2022, the pension allowance for you is 14.4% of the remuneration, up to a maximum of 1.080 Euro, and the supplement to the pension allowance is 324 Euro. Together with the work-related expenses allowance of 102 Euro, the remuneration is therefore tax-free up to 1.506 Euro - for life.

Health insurance: Higher thresholds for family insurance

In statutory health and nursing care insurance, family members are co-insured free of charge if their total income does not regularly exceed one seventh of the monthly reference amount per month. As the reference amount usually changes annually, the income limit for the free insurance of family members in statutory health insurance also changes. The income limit for family insurance is generally 470 Euro per month in 2022.

The income limit may be exceeded three times a year without losing the free family insurance. This limitation will be lifted and the regulation extended indefinitely. If the income limit is exceeded several times, it is possible to take out voluntary insurance in the statutory health insurance.

Tax relief for charitable organisations

For donations to help those affected by the Corona crisis - regardless of the amount - the simplified donation receipt is sufficient. This is intended to reduce the administrative burden for the supported organisations. (BMF decree of 9.4.2020, IV C 4 -S 2223/19/10003).

Donations to support refugees and those left behind in the Ukraine war are for charitable purposes. Donations are deductible as special expenses, up to 20% of the total income. Donations exceeding this limit can be carried forward to the following year and taken into account there within the limit. This donation carryforward is unlimited in time (§ 10b para. 1 no. 1 EStG).

In principle: No tax relief without a donation receipt! Donations must always be proven with a formal donation receipt in the officially prescribed form in order to obtain the desired tax deduction. However, for donations to refugees, a simplified donation receipt applies from 24.2. to 31.12.2022. In the case of donations in the event of a disaster, the cash deposit slip or the bank's booking confirmation, e.g. account statement, direct debit slip or PC printout in the case of online banking, is sufficient. The amount of the donation does not matter.

Support for dependants: Increase in maximum maintenance amount

On 1.1.2022, the maximum maintenance amount was increased to 10.347 Euro. The maximum maintenance amount is often not granted at this level, but is reduced. Namely by one twelfth for each full calendar month in which the conditions are not met, by the recipient's own income and benefits that exceed the allowance of 624 Euro, and by one, two or three quarters if the recipient lives in a country with a lower standard of living.

(2022): Tax return for 2022: What's new

Which types of income and forms are supported by Lohnsteuer kompakt 2022?

Programme scope according to § 87c AO

The income tax return can only be prepared with this software for persons with unlimited tax liability in Germany. If you are subject to limited tax liability in Germany (§ 1 para. 4 EStG), it is not possible to prepare your income tax return with this application.

The latest version for the tax year 2022 supports you in preparing the tax return in the following areas:

• Main tax form - Income tax return for (unlimited) taxable persons
• Form Special Expenses
• Form Extraordinary Expenses
• Form WA-ESt - Further information and applications in cases with foreign reference
• Form Child - Information on the tax consideration of children
• Form VOR - Pension expenses
• Form AV - Riester pension (pension contributions as special expenses according to § 10a EStG)
• Form N - Income from employment
• including business expenses for travel/working away from home
• Form N-AUS - Foreign income from employment
• Form R - Pensions and other benefits from pension contracts
• Form R-AUS - Pensions and other benefits from foreign insurance / foreign pension contracts / foreign company pension schemes
• Form R-AV/bAV - Benefits from domestic pension contracts and domestic company pensions
• Form V - Income from renting and leasing
• Form KAP - Income from capital assets (initially interest and dividend income)
• Form KAP-BET - Income and creditable taxes from participations
• Form KAP-INV - Declaration of investment funds not subject to domestic tax deduction
• Form S - Income from self-employment
• Income from partnerships according to § 15 EStG and from venture capital companies cannot currently be recorded.
• Form G - Income from business operations
• Income from partnerships according to § 15b EStG (tax deferral models), income from sales to a REIT-AG and income from commercial animal breeding, forward transactions or participations cannot be recorded.
• Form Corona - Corona emergency aid, bridging aid and comparable grants
• Form EÜR - Income surplus calculation
• The income surplus calculation (according to § 4 para. 3 EStG) is the simplest form of profit determination
• Form SO - Other income
• Form SO Part 1: Here you can record maintenance payments received, recurring payments, benefits and parliamentary allowances.
• Form SO Part 2: Here you can declare income from private sales transactions (real estate, assets).
• Form Maintenance - Maintenance payments to persons in need (within the framework of extraordinary expenses)
• Form FW - Tax relief for the promotion of home ownership and deduction of preliminary costs (according to §10e EStG)
• Form Energy Measures - Expenditure on energy measures for buildings used for own residential purposes
• Form Mobility Premium - Information on the application for the mobility premium

We will keep you regularly updated on the latest updates in our newsletter and on Facebook and Twitter.

The following forms to the income tax return are not available:

• Form AUS - Foreign income
• Form N-GRE - Cross-border commuters in Baden-Württemberg (workplace in F, CH, A)
• Form L - Income from agriculture and forestry
• Form Forestry - Income from timber use subject to preferential tax rates (to Form L)
• Form WEIN - Non-accounting wine-growing businesses (to Form L)

(2022): Which types of income and forms are supported by Lohnsteuer kompakt 2022?

Am I required to save my data?

No, you do not need to save the data you enter in the tax return at Lohnsteuer kompakt again.

As soon as you leave an input field, it is automatically saved in the background. Once you have completed a page, click the "Next" button at the bottom right of the page to proceed to the next step. You can, of course, change any entries you have already made later. Simply use the navigation to jump to the desired section.

(2022): Am I required to save my data?

By when do I have to submit my tax return?

For the 2018 tax return, the submission deadlines were legally extended by two months. This also applies to the 2022 tax return:

• For citizens who prepare their tax return themselves, the submission deadline is extended by 2 months from 31 May to 31 July of the following year (§ 149 para. 2 AO). The 2022 tax return must therefore be submitted by 31 July 2023.
• Citizens who are advised by a tax advisor or income tax assistance association also have two more months to submit their return. While under the previous "deadline decree" an extension beyond 31 December of the following year was only possible on the basis of justified individual applications, there is now time until the end of February of the second following year, i.e. for the year 2022 until 28 February 2024 (§ 149 para. 3 and 4 AO).

But beware: The tax authorities have the option of the so-called advance request. You may therefore have to submit your tax return before the dates mentioned. In any case, high late fees are threatened for late submissions. Their imposition is no longer at the discretion of the tax officer but is mandatory.

Due to the significant burdens caused by the coronavirus pandemic, the deadlines for submitting income, corporation, trade, and VAT returns have been repeatedly extended - and once again now by the "Fourth Coronavirus Tax Assistance Act".

1.  2020 tax return

For taxpayers who prepare their tax return themselves, the submission deadline was extended by 3 months from 31 July 2021 to 31 October 2021. If the tax return is prepared by a tax advisor or income tax assistance association, the new submission deadline is 6 months later, i.e. on 31 August 2022.

2.  2021 tax return

For taxpayers who prepare their tax return themselves, the submission deadline is extended by 3 months from 31 July 2022 to 31 October 2022. If the tax return is prepared by a tax advisor or income tax assistance association, the new submission deadline is 6 months longer and ends instead of 28 February 2023 on 31 August 2023.

3.  2022 tax return

For taxpayers who prepare their tax return themselves, the submission deadline is extended by 2 months from 31 July 2023 to 30 September 2023. If the tax return is prepared by a tax advisor or income tax assistance association, the new submission deadline is 5 months longer and ends instead of 29 February 2024 on 31 July 2024.

4.  2023 tax return

For taxpayers who prepare their tax return themselves, the submission deadline is extended by 1 month from 31 July 2024 to 31 August 2024. If the tax return is prepared by a tax advisor or income tax assistance association, the new submission deadline is 3 months longer and ends instead of 28 February 2025 on 31 May 2025.

5.  2024 tax return

For taxpayers who prepare their tax return themselves, there is no longer an extension. If the tax return is prepared by a tax advisor or income tax assistance association, the new submission deadline is 2 months longer and ends instead of 28 February 2026 on 30 April 2026.

Note: For the sake of completeness, it should be noted that the deadlines mentioned above are postponed to the end of the next working day if they fall on a Sunday, a public holiday, or a Saturday. Example: 31 October 2022 is a public holiday in some federal states. Thus, the deadline for submitting the 2021 tax return in these federal states is postponed to 1 November 2022.

Submission deadlines for the tax return

Apply for an extension

However, if you can foresee that your tax return will not be ready in the next few weeks, it is better to apply for an extension sooner rather than later. This application should actually be submitted before 31 July 2023 and there is no entitlement for the tax office to grant it. It is best to apply for a tacit extension; if you do not hear anything further, your application has been approved. It is important that you provide reasons for your request. These include, for example, a move, a business trip, illness, or missing documents. If the tax office accepts the extension, you usually have until 31 December 2024 at the latest.

Tax advisor ensures extension

If you have commissioned a tax advisor or income tax assistance association, you are in luck. The deadline is then automatically extended to 28 February 2024, unless the tax office explicitly requests an earlier submission. The reason for the later date is simple: it is not reasonable to expect tax experts to do all the work in the first five months of the year.

Eventually, the reminder will come

If you do not respond, the tax office will sooner or later send you a reminder and set a deadline. You should take this date seriously, otherwise, a penalty payment may be imposed, and a hefty late fee may be incurred. It is better to get in touch in good time.

Voluntary submission allows more time

If you are one of those who are not obliged to submit a tax return, none of this needs to concern you. The tax office does not expect money from you but will probably have to refund some. For this very reason, however, it is advisable not to put off the income tax return. Legally, you have long enough: in the case of voluntary assessment, there are generally four years in which the tax return can (but does not have to) be submitted.

Your tax return for 2022 must therefore be received by 31 December 2026 – not a day later, otherwise all the work is for nothing. However, it is better not to exhaust the time limit but to take care of it early. Experience shows that it is easier to gather the necessary documents in the following year than three years later. Moreover, it is about money – who wants to wait four years for the refund?

(2022): By when do I have to submit my tax return?

Who is not required to submit a tax return?

Submitting a tax return is always voluntary if you are not legally obliged to do so (see below). This particularly applies to employees in tax class I who only have income from their employment. It also applies to married couples with the tax class combination IV/IV - but the factor method must not be used.

Your income is already taxed, and you may be able to save yourself the forms for the tax office. In these cases, the tax office will not ask you to submit a tax return. However, in 9 out of 10 cases, these employees receive a refund of overpaid taxes from the tax office.

The tax authorities do not expect any money from you; they will probably have to refund some to you. There is almost always a tax refund involved.

Assessment upon application: You voluntarily submit your tax return

If you submit a tax return to the tax office even though you are not required to do so, this is referred to in tax law as an assessment upon application. For an assessment upon application, you generally have four years to submit the tax return and secure the tax refund.

(2022): Who is not required to submit a tax return?

Who is fully liable to pay tax?

Fully liable to tax are, according to §1 EStG:

• natural persons who have a residence or their usual place of abode in Germany, and
• German nationals abroad who are paid from public funds. This includes, for example, members of a German embassy abroad.

While the second point is clear, the first point needs to be examined more closely:

• Natural persons are basically all people, regardless of age.
• A person has a "residence" where they live (§8 AO). It does not matter whether it is a suburban villa or just a furnished room in a shared flat. A taxpayer can also have multiple residences, for example in Germany and abroad.

• The term "usual place of abode" is used if someone stays in Germany for at least six months at a stretch (§9 AO). Short interruptions during this period are possible.

(2022): Who is fully liable to pay tax?

Who is subject to limited tax liability?

Limited income tax liability under Section 1 (4) EStG applies to individuals who

1. do not have a residence or habitual abode in Germany,
2. have certain domestic income as defined in Section 49 EStG, and
3. are not subject to unlimited income tax liability on application according to Section 1 (3) EStG (cross-border commuters) or
4. extended unlimited income tax liability according to Section 1 (2) EStG.

For them, the tax is collected through tax deduction or by means of an assessment for limited tax liability.

Note: Special regulations apply for cross-border commuters from France, Austria, and Switzerland.

Numerous personal and family-related tax benefits are not taken into account in the assessment for limited tax liability, including:

• Spouse splitting (joint assessment) cannot be claimed.
• The bereavement splitting for widows/widowers in the year following the death is not granted (Section 32a (6) EStG).
• Extraordinary burdens cannot be claimed for tax purposes (Sections 33, 33a, 33b EStG).
• A disability allowance and care allowance are not available to you (Section 33b EStG).
• Child allowance and allowances for care, education, and training are not granted (Section 32 EStG).
• The relief amount for single parents is not available to you (Section 24b EStG).
• The tax reduction for domestic help, household-related services, and craftsmen's services in a flat (Section 35a EStG) in the EU/EEA countries is not granted from 2009.
• Business expenses are generally only deductible if proven and if they are directly economically related to domestic income.
• However, the flat rate for business expenses of 1.000 Euro for income from employment is also taken into account if no higher business expenses related to the income are proven.
• For pension income, at least the flat rate for business expenses of 102 Euro is taken into account.

(2022): Who is subject to limited tax liability?

Marriage splitting (Ehegattensplitting) for registered civil partnerships

The Federal Constitutional Court has ruled:

Registered civil partnerships are also entitled to joint tax assessment with the splitting tariff. The unequal treatment of same-sex marriages and "normal" marriages in spouse splitting is unconstitutional (BVerfG ruling of 7.5.2013, 2 BvR 909/06).

The legislator was required to amend the legal situation retroactively from 1.8.2001 - the day the Civil Partnership Act came into force. A new general clause was added to the Income Tax Act:

"The provisions of this Act for spouses and marriages also apply to civil partners and civil partnerships" (§ 2 para. 8 EStG).

The new regulation applies to all still open tax cases in which income tax has not yet been definitively assessed (§ 52 para. 2a EStG).

Further equalisation will take place from 1.1.2015 with the "Act to Revise the Civil Partnership Law" of 15.12.2004. This law further expands the legal equality of same-sex civil partners with spouses.

Please select "Same-sex marriage/civil partnership" as your marital status in Lohnsteuer kompakt.

For same-sex couples and registered civil partners who wish to submit a joint tax return (=joint assessment), the tax authorities have specified who should be entered as the taxable person:

• Enter the partner first in the tax return whose surname comes first in alphabetical order.
• If the surnames are the same, the alphabetical order of the first names decides.
• If the first names are also identical, the older partner should be entered as the taxpayer.

(2022): Marriage splitting (Ehegattensplitting) for registered civil partnerships

Who is entitled to the bereavement allowance?

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. Grace splitting is also known as widow's splitting.

The surviving spouse opts for the individual assessment for single persons under § 25 EStG, but exceptionally and for the last time, the favourable splitting rate is applied (so-called grace splitting under § 32a para. 6 no. 1 EStG). However, the condition for grace splitting / 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 grace splitting (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.

(2022): Who is entitled to the bereavement allowance?