Determination of electronic income tax deduction items (ELStAM), claiming income tax reduction

In principle, tax-deductible expenses are taken into account after the end of the calendar year as part of the income tax assessment.

However, there is an income tax reduction procedure in which you can claim a tax allowance for certain expenses. If a tax allowance is entered as an electronic income tax deduction item (ELStAM), the income tax that your employer must withhold from your wages is already reduced during the calendar year.

Obligation to file an income tax return

If a tax allowance has been entered for you as ELStAM, you must submit an income tax return to the tax office without being asked to do so after the end of the calendar year. Insofar as you are not obliged to submit a return for other reasons, you are only obliged to submit a tax return due to the tax allowance if your income for the calendar year – and in the case of joint tax assessment that of your spouse/life partner – has exceeded certain amounts. These are as follows:

In the event of an individual tax assessment

  • 2016: EUR 11.000
  • 2017: EUR 11.200
  • 2018: EUR 11.400
  • 2019: EUR 11.600
  • from 2020: EUR 11.900

In the event of a joint tax assessment

  • 2016: EUR 20.900
  • 2017: EUR 21.250
  • 2018: EUR 21.650
  • 2019: EUR 22.050
  • from 2020: EUR 22.600

If the tax office has only taken into account the lump-sum for disabled persons and/or the lump-sum for surviving dependents as a tax allowance, you are not obliged to submit a tax return due to these allowances alone (but possibly due to other circumstances, if applicable).

Among other things, a tax allowance may be taken into account for:

  • Professional expenses, if they exceed the lump-sum allowance of EUR 1.000 for employees
  • Special expenses
  • Exceptional expenses
  • Other reasons for tax reduction

Professional expenses of employees

(if they exceed the lump-sum allowance of EUR 1.000)

Examples:

  • Expenses for commuting to your primary location of employment (so-called “Pendlerpauschale”)
  • Expenses for work equipment, such as technical literature, tools or typical work clothing

Special expenses

(if they exceed the special expenses lump-sum of EUR 36.00 for individuals and EUR 72.00 for married couples and partners in a registered civil partnership who are assessed jointly)

Examples:

  • Alimony payments to a divorced/permanently separated spouse or partner
  • Church tax paid (except church tax on flat rate withholding tax)

Exceptional expenses

Examples:

  • Allowance for special expenses incurred through the vocational training of an adult child
  • Alimony expenses paid to persons entitled to them by law
  • Lump-sum for disabled persons
  • Lump-sum for surviving dependents

Other reasons for tax reduction

Examples:

  • Increase in tax relief for single parents
  • Negative income from capital assets (which does not fall under the ban on offsetting losses)

You can also apply for a tax reduction for expenses for household-related employment, the use of household-related services and craftsmen's services in the income tax reduction procedure

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Service details

Prerequisite

You can only have an allowance for exceptional, increased professional or increased special expenses entered as ELStAM if these expenses or the tax deductible amounts in total exceed an application limit of EUR 600.00.

Calculation of the application limit

  • Professional expenses are only taken into account if they exceed the employee lump-sum allowance of EUR 1.000.
  • While insurance contributions (e.g. to pension, health and long-term care insurance) are also regarded as special expenses, they cannot be claimed in the reduction procedure. These pension expenses are already taken into account in the current income tax deduction system via the so-called provisional lump-sum.

The application limit does not apply to the lump-sums for disabled persons and surviving dependents.

Procedure

 

If you want your expenses to have a tax-reducing effect during the course of the calendar year, you must apply to the tax office for a reduction in income tax.

An application for income tax reduction can be submitted for a period of no more than two calendar years.

Application

  • Use the form "Antrag auf Lohnsteuer-Ermäßigung", which is available at the tax office and online at Amt24 (“Online application and forms”), indicating the calendar year for which you are applying for the tax allowance.
  • If you want the tax allowance to be taken into account for the subsequent calendar year (Folgejahr) as well, tick the appropriate box on page 1 of the form. In this case, a separate application for income tax reduction for the subsequent year is no longer necessary.
  • Submit the completed form in person or in writing to the tax office; if you submit it in person, your application will usually be processed immediately.

Creation of the tax allowance

  • The tax office checks whether and in what amount an allowance can be created.
  • It enters the tax allowance as an income tax deduction item in the ELStAM database so that it can be made available to your employer for electronic retrieval. In certain cases, the tax office will enter the tax allowance on your income tax deduction certificate; you should then submit this to your employer.

Change request/change notification

  • You can have the tax allowance adjusted if the relevant circumstances change in your favor (e.g. extension of the commute to your primary location of employment, resulting in higher travel costs as part of your professional expenses).
  • If the circumstances relevant for the allowance change to your disadvantage (e.g. shortening of your commute to the primary location of employment, resulting in lower travel costs as part of your professional expenses), you are obliged to notify the tax office immediately so that the allowance can be reduced.

Required documents

  • Antrag auf Lohnsteuer-Ermäßigung (Application for income tax reduction; see "Online application and forms")
  • Proof (if applicable)

Deadlines

Application for the creation of a tax allowance

From October 1 of the previous year until November 30 (at the latest) of the (first) year to which the tax allowance is to apply.

Examples:

  • For 2020 or 2020/2021: from October 1, 2019 to November 30, 2020
  • For 2021 or 2021/2022: from October 1, 2020 to November 30, 2021

Note: After this period, you can only claim the tax allowances as part of the tax assessment for your income tax return after the end of the calendar year.

Change request/change notification

  • Change request (in your favor): November 30 of the year for which the changed tax allowance is to be taken into account
  • Notification of change (to your disadvantage): immediately

Income tax return

As a rule, you must submit your income tax return for a year to the tax office

  • by July 31 of the subsequent year.

Legal basis

  • § 2 Abs. 8 Einkommensteuergesetz (EStG) – eingetragene Lebenspartnerschaft
  • § 9 Einkommensteuergesetz (EStG) – Werbungskosten
  • § 9a Einkommensteuergesetz (EStG) – Pauschbeträge für Werbungskosten
  • § 10 Einkommensteuergesetz (EStG) – Sonderausgaben
  • § 24b Einkommensteuergesetz (EStG) – Entlastungsbetrag für Alleinerziehende
  • § 33 Einkommensteuergesetz (EStG) – Außergewöhnliche Belastungen
  • § 33a Einkommensteuergesetz (EStG) – Außergewöhnliche Belastungen in besonderen Fällen
  • § 33b Einkommensteuergesetz (EStG) – Pauschbeträge für behinderte Menschen, Hinterbliebene und Pflegepersonen
  • § 35a Einkommensteuergesetz (EStG) – Steuerermäßigung für haushaltsnahe Beschäftigungsverhältnisse, Dienstleistungen und Handwerkerleistungen
  • § 39 Einkommensteuergesetz (EStG) – Lohnsteuerabzugsmerkmale
  • § 39a Einkommensteuergesetz (EStG) – Freibetrag und Hinzurechnungsbetrag
  • § 39e Einkommensteuergesetz (EStG) – Elektronische Lohnsteuerabzugsmerkmale

Release note

Saxon State Ministry of Finance. 14.01.2020