Certain expenses listed exhaustively in the law can be deducted from the total amount of income as special expenses if they are neither business expenses nor income-related expenses. They are either deductible without restriction (e.g. church tax paid) or limited within the framework of maximum amounts graduated according to marital status (e.g. pension expenses = insurance contributions of a pension nature, expenses for own vocational training, school fees, expenses for additional pension provision).
The so-called Retirement Income Act (Alterseinkünftegesetz) introduced a system change in the taxation of retirement income and the special expense deduction for pension expenses (e.g. contributions to statutory pension insurance) on January 1, 2005. Since 2015, the maximum amount of pension expenses that you can deduct as special expenses has been based on the maximum contribution to the miners' pension insurance. This maximum amount is doubled for jointly assessed spouses/life partners. For taxpayers who are entitled to a pension without or largely without their own contributions (e.g. civil servants, judges, members of parliament), the maximum amount is reduced by a notional total contribution to the statutory pension insurance (employee and employer share).
Since the system change, the contributions can only be recognized as special expenses on a pro rata basis during a transitional phase. The deductible portion of expenses has increased by 2% annually since 2005 (60% deductible). The full deduction of special expenses previously planned from 2025 has been brought forward to 2023. This means that 100% of contributions can be deducted as special expenses from 2023. For employees, the tax-free employer's contribution to statutory pension insurance will then be deducted.
The actual contributions to private and statutory basic health and compulsory long-term care insurance have been fully deductible as special expenses since 2010. Contributions to other pension insurance (e.g. liability insurance, unemployment insurance, contributions for "comfort benefits" in health insurance) are taken into account - together with contributions to health and long-term care insurance - up to the following maximum annual amounts:
- for entrepreneurs or self-employed persons: up to € 2,800
- for employees and civil servants: up to €1,900
A lower maximum amount is available to employees and civil servants because they are entitled to reimbursement of medical expenses in full or in part without incurring any expenses of their own (e.g. civil servants) or because tax-free benefits are provided for their health insurance (e.g. for employees).
Contributions to basic health and long-term care insurance are also fully deductible if they exceed the aforementioned maximum amounts. In this case, however, the deduction of contributions to other pension insurance is not applicable.
Maintenance payments to a divorced or permanently separated spouse can be deducted by you as special expenses up to an annual amount of € 13,805; for the recipient, the maintenance payments are subject to income tax as other income (so-called limited real splitting). An application is required for the deduction; the recipient must have agreed to the application. Since 2010, contributions to health or long-term care insurance for a divorced or permanently separated spouse/life partner have also been deductible.
Since 2012, you have been able to deduct private childcare costs as special expenses for children who have not yet reached the age of 14. Two thirds of the expenses are deductible, up to a maximum of €4,000 per (household) child.
Expenses for the promotion of charitable, benevolent and ecclesiastical purposes as well as donations to political parties can also be taken into account as special expenses. Among many other purposes, the promotion of animal welfare, education, nature conservation or development aid are recognized as charitable purposes.
Donations are generally deductible up to 20% of the total amount of the donor's income or up to 4 per thousand of the total turnover and wages and salaries spent in the calendar year. Special maximum limits apply to donations to political parties. In addition, there is a tax reduction for donations to political parties and independent voter associations in accordance with Section 34g EStG amounting to 50% of the expenditure, up to a maximum of €825/1,650 each (single person/spouse).