As a rule,alimony payments do not count as income. An exception to this is the so-called real splitting between divorced or permanently separated spouses/life partners. If you pay alimony to your divorced or permanently separated spouse/life partner, you can deduct the alimony payments up to an amount of € 13,805 per calendar year as special expenses with his/her consent. The prerequisite is that you and the payee live in Germany. Your divorced spouse/life partner must then pay tax on these payments as other income. This does not apply to maintenance payments to your child.
Wage replacement benefits do not count as income. Wage replacement benefits include, among others
- Unemployment benefit I
- Short-time allowance
- Insolvency benefit
- Sickness benefit
- Maternity benefit
- Parental allowance in accordance with the Federal Parental Allowance and Parental Leave Act (Bundeselterngeld- und Elternzeitgesetz)
- Transitional allowance
Although wage replacement benefits are tax-free, they are subject to progression. They are added to the income of the respective year for the calculation of your tax rate (income + wage replacement benefits = income on which the tax rate is based). Therefore, you must declare them in your tax return.
The receipt of unemployment benefit II is tax-free and, as a pure social benefit, is not subject to the progression proviso. The same applies to the federal child-raising allowance, the state child-raising allowance and the municipal child-raising allowances paid by the youth welfare offices to legal guardians. You therefore do not have to declare these payments in your income tax return.
On the other hand, allowances paid to gainfully employed caregivers are taxable. As a rule, gainful employment is assumed if more than five children are looked after.
Legal basis:
- § Section 22 No. 1a in conjunction with Section 10 (1a) of the German Income Tax Act (EStG)
- § 3 No. 11 and 67 in conjunction with § 32b EStG