In addition to raising the employee lump sum (to €1,200) and the early increase of the commuter allowance (€0.38 from the 21st kilometre onward), the Tax Relief Act 2022 also introduced a generally taxable energy allowance of €300. The energy price allowance is intended to relieve those groups of the population who typically incur travel costs in connection with generating income and who are heavily affected by current energy price developments in this regard. The energy price allowance is also socially structured, in that the net relief is reduced in line with the individual income tax rate.
Eligibility for the energy price allowance
Entitlement to the energy price allowance applies to all persons who were subject to unlimited income tax liability in Germany for at least part of the year 2022. In addition, to claim the energy price allowance, at least one of the following types of income must have been generated in 2022:
- § 13 EStG (agriculture and forestry)
- § 15 EStG (commercial business)
- § 18 EStG (self-employed activity)
- § 19 Abs. 1 S. 1 Nr. 1 EStG (income as an employee from active employment)
Persons who live in Germany but work for an employer abroad (cross-border commuters) are also eligible. Note, however, that these persons do not receive the energy price allowance from the employer, but rather have it credited or paid out upon filing the 2022 tax return. Among eligible employees, the following are of particular note:
- Short-term and marginally employed persons (mini-jobbers)
- Working students and students in paid internships
- Employees who receive taxable or tax-free employer subsidies (e.g. employees on parental leave receiving parental allowance)
- Employees receiving exclusively tax-free wages (volunteer instructors or carers)
Eligibility for recipients of pension benefits and retirement pensions
The situation is different for persons who received pension benefits (in particular civil servant pensions) or retirement income and who, in addition, did not generate any income from the specified income categories (§ 13, § 15, § 18, § 19 Abs. 1 S. 1 Nr. 1 EStG) in 2022. This group of persons is not entitled to the energy price allowance. However, if such persons generate income from the listed categories (§ 13, § 15, § 18, § 19 Abs. 1 S. 1 Nr. 1 EStG) in addition to their pension or retirement benefits, they are also eligible.
There is no prescribed point in time or minimum duration of the activity. What matters is only that the eligible person engaged in any activity falling under the listed income categories at some point during 2022.
Assessment and payment of the energy price allowance
The energy price allowance is either paid out via the employer, taken into account as a reduction in the income tax prepayment due on 10 September 2022, or determined in the assessment procedure. As a general rule, for anyone filing an income tax return for 2022, the tax office automatically checks (without an application) whether there is an entitlement to the energy price allowance.
Processing for employees
Employees who, as of 1 September 2022, are in an employment relationship with their employer receive the energy price allowance through their wages. The disbursed energy price allowance is then visible in the electronic wage tax certificate or in a separate wage tax certificate under the capital letter E. If, for organisational or payroll-technical reasons, the energy price allowance is not paid out in September 2022, payment may also be made with the payroll at a later point in 2022.
The energy price allowance is not paid out by the employer only if there was no active employment relationship as of 1 September 2022 or if the employee is engaged on a short-term basis. In these cases, the energy price allowance is taken into account upon filing the 2022 income tax return.
Reimbursement of the employer
The energy price allowances paid out are reimbursed to the employer by being deducted from the total amount of wage tax to be withheld. If the total energy price allowance granted exceeds the wage tax to be paid, the excess amount is refunded by the tax office.
Energy price allowance with profit income
If only profit income (§ 13, § 15, § 18 EStG) and no surplus income (§ 19 etc. EStG) is generated in the 2022 assessment period, the energy price allowance reduces the income tax prepayment for the 3rd quarter of 2022. However, if the assessed prepayment for the 3rd quarter of 2022 is less than €300, the prepayment is €0 and the remainder is paid out or offset in the context of the income tax return.
Double energy price allowance accounted for
If a taxpayer receives the energy price allowance from the employer on the one hand, and on the other hand has it credited as a reduction of the 2022 income tax prepayment in the case of profit income (e.g. from a photovoltaic installation), a correction is made upon filing the 2022 income tax return.
Frequently asked questions
Frequently asked questions
Who is entitled to the 300 EUR energy price allowance?
Eligible are all individuals who were subject to unlimited income tax liability in Germany for at least part of 2022 and earned income under § 13 EStG (agriculture and forestry), § 15 EStG (business operations), § 18 EStG (self-employment), or § 19 Abs. 1 S. 1 Nr. 1 EStG (active employment). Mini-jobbers, working students, cross-border commuters, and employees with tax-free wages (e.g., instructors) are also entitled. No specific date or minimum duration of activity is required.
Do pensioners and retired civil servants receive the energy price allowance?
Individuals receiving only a pension or retirement benefits (e.g., civil servant pensions) are not entitled to the energy price allowance, as these payments are not among the qualifying types of income. They are only eligible if they additionally generate income under § 13, § 15, § 18 or § 19 Abs. 1 S. 1 Nr. 1 EStG.
How is the energy price allowance paid out to employees?
Employees in an active employment relationship on 01.09.2022 receive the 300 € from their employer together with their wages. The payment is reported on the income tax statement (Lohnsteuerbescheinigung) with the capital letter E. For organizational reasons, the payment may also be made later in 2022. If there was no active employment relationship on 01.09.2022, or in the case of short-term employees, the allowance is only granted via the 2022 income tax return.
How are employers reimbursed for the energy price allowance they have paid out?
The employer deducts the energy price allowances paid out from the total amount of wage tax to be withheld. If the total allowance granted exceeds the wage tax to be remitted, the excess amount is refunded by the tax office.
How does the Energiepreispauschale (energy price lump sum) affect business and professional income?
For taxpayers earning exclusively profit-based income under § 13, § 15 or § 18 EStG, the Energiepreispauschale reduces the income tax prepayment for Q3 2022 (due 10 September 2022). If the prepayment is less than €300, it is reduced to €0, and the remaining amount is offset or paid out as part of the 2022 income tax assessment.
What happens if the energy price allowance was credited twice?
If a taxpayer receives the allowance both through their employer and as a reduction of the income tax prepayment for business income (e.g., from a photovoltaic system), a correction is made within the 2022 income tax assessment so that the allowance is granted only once.