Basics of Maintenance Payments
Maintenance payments to relatives, children, and separated partners may be taken into account for tax purposes if the recipients are unable to provide for their own support. Maintenance payments generally cover all expenses for everyday living (e.g. food, clothing, housing, etc.) and for pursuing vocational training (§ 33a sentence 1 EStG). The payments may be made on a regular basis or as a single payment for the calendar year. With regular payments, it is particularly important to note that they may not be made for previous or subsequent months (H 33a.1 EStH). Maintenance payments to relatives and children can be claimed as extraordinary expenses in the tax return. For maintenance payments to a divorced partner, there is a choice: they can be claimed either as special expenses (Sonderausgaben) or as extraordinary expenses.
Maintenance Payments as Extraordinary Expenses
Maintenance payments to relatives and children can be claimed as extraordinary expenses in the tax return. For maintenance payments to a divorced partner, there is a choice: they can be claimed in the tax return either as special expenses or as extraordinary expenses. For extraordinary expenses, the upper limit is the basic tax-free allowance (Grundfreibetrag) of the respective calendar year (e.g. €9,408 in 2020 and €9,744 in 2021). What matters here is whether the maintenance payments were made throughout the entire calendar year. Otherwise, the tax office deducts those months in which no maintenance payments were made, and the maximum amount is reduced accordingly. The maximum amount is additionally increased by the contributions paid for the recipient's health and long-term care insurance. Unlike with real splitting (Realsplitting), the recipient is neither required to pay tax on the maintenance payments received nor to give consent for the payments. However, there are certain restrictions on claiming maintenance payments as extraordinary expenses. In particular, assets of the recipient exceeding €15,500 are considered harmful, meaning no extraordinary expenses can be claimed. However, an objectively reasonable owner-occupied home (§ 90 Abs. 2 Nr. 8 SGB XII) and items of outstanding personal value are not taken into account when assessing the recipient's assets. In addition, the recipient may not have income exceeding €624 per year (§ 33a sentence 6 EStG). If the recipient's income exceeds this amount, the excess is deducted from the claimed extraordinary expenses. In addition, a flat-rate cost allowance of €180 per calendar year is deducted in the calculation for supporting persons. Finally, the tax office also takes into account any public funds received (e.g. unemployment benefits or BAföG), which reduce the maximum amount.
Overview of Determining the Maximum Maintenance Payment Amount for 2020
Maximum amount 2020
€9,408
Increase by health and long-term care insurance contributions pursuant to § 33a Abs. 1 sentence 2 EStG
+ ……… €
Increased maximum amount
……….. €
Determination of the supported person's income
……….. €
Determination of the supported person's other receipts – excluding training assistance from public funds
…………. €
Flat-rate cost allowance (R 33a.1 Abs. 3 sentence 5 EStR)
./. €180
Relevant receipts
……….. €
……….. €
Total income and receipts of the supported person (H 33a.1 [Crediting of own income and receipts] EStH)
…………. €
Non-harmful amount
./. €624
Harmful amount
…………. €
./. ……. €
Reduced maximum amount (interim result)
……….. €
Training assistance from public funds
./. ……. €
Reduced maximum amount
……….. €
Real Splitting (Realsplitting)
For maintenance payments to a divorced partner, there is the option of real splitting (§ 10 Abs. 1a Nr. 1 EStG), whereby the payer can claim these payments as special expenses. The maximum amount here is €13,805 per calendar year, reduced by the months in which no maintenance payments were made to the recipient. As with extraordinary expenses, contributions paid for the recipient's health and long-term care insurance are added to the maximum amount under real splitting as well. A particular point to note with real splitting is that the recipient must pay tax on the payments as other income. For this reason, real splitting must be agreed before the relevant calendar year in Annex U of the tax return, signed by both the payer and the recipient. By doing so, however, the payer commits to compensating the recipient for any tax and social-security disadvantages incurred.
Special Considerations for Maintenance Payments to Children
Maintenance payments for one's own children can only be claimed as extraordinary expenses if no child benefit (Kindergeld) or child allowance (Kinderfreibetrag) is being claimed for them.
Frequently asked questions
Frequently asked questions
How can support payments to relatives be claimed for tax purposes?
Support payments to dependent relatives and children can be claimed as extraordinary expenses in the income tax return pursuant to § 33a EStG. For payments to divorced spouses, there is an option to choose between extraordinary expenses and the special expense deduction (Realsplitting). A prerequisite is that the recipient is unable to provide for their own maintenance.
What is the maximum deductible amount for maintenance payments as an extraordinary burden?
The maximum amount equals the basic tax-free allowance (Grundfreibetrag) for the respective calendar year (e.g., €9,408 in 2020 and €9,744 in 2021). It is increased by the recipient's health and long-term care insurance contributions assumed by the payer. If maintenance was not paid for the entire year, the tax office reduces the maximum amount pro rata for the months without payment.
What asset and income limits apply to the recipient of the maintenance payments?
The recipient's assets must not exceed €15,500; otherwise, the deduction as an extraordinary expense is excluded. A reasonable residential property and items of personal value are not counted. The recipient's own income and earnings exceeding €624 per year reduce the deductible maximum amount; in addition, a lump-sum allowance of €180 is deducted.
What is Realsplitting for maintenance payments to divorced spouses?
Under Realsplitting pursuant to § 10 Abs. 1a Nr. 1 EStG, the payer may deduct maintenance payments to a divorced or permanently separated spouse as special expenses up to €13,805 per year, increased by any health and long-term care insurance contributions assumed. The recipient must declare the payments as other income and consent to the application via Anlage U. The payer is obliged to compensate the recipient for any resulting tax and social security disadvantages.
Can maintenance payments for one's own children be deducted for tax purposes?
Maintenance payments for one's own children can only be claimed as an extraordinary expense (außergewöhnliche Belastung) if neither child benefit (Kindergeld) nor the child tax allowance (Kinderfreibetrag) is claimed for the child. In all other cases, maintenance payments are already covered for tax purposes by Kindergeld or the Kinderfreibetrag.