Tax Class II in Germany – Everything You Need to Know

Tax classes in Germany are a comprehensive topic – belonging to a specific group affects the settlement with the tax office and determines which taxes are ultimately paid. In most cases, an automatic assignment to a particular class occurs, but sometimes there is the option to choose. Today, the focus is on the 2nd tax class in Germany – it will be explained who can benefit from it and what advantages it offers.

Tax class – one of many in Germany

Before moving on to the main topic, the peculiarities of the German tax system cannot go unmentioned. It is characterized by six different tax classes – belonging to one of them determines, among other things, how much salary is transferred to the account, how much tax is deducted, and what benefits can be used.

Thus, the tax class has a major impact on the type of settlement and the amount of taxes. Currently, in Germany there are:

• Tax class I – for single, divorced persons, as well as taxpayers whose partners live outside the EU,
• Tax class II – for people raising children alone,
• Tax class III– for non-working spouses whose partners have chosen class V,
• Tax class IV – the automatic class for married employees who have not chosen another combination,
• Tax class V – for spouses whose partners do not work and are in class III,
• Tax class VI – for single people who have income from more than one source (multiple jobs).

There is often uncertainty about the obligation to file a tax return, especially with tax class I. Detailed information on this, when you need to file a tax return with tax class 1, helps in clarifying this question.

Tax class – for whom?

The second tax class applies to single parents with at least one child who are not married, divorced, widowed, or permanently separated. It is similar to the 1st tax class regarding salaries, but offers better conditions due to the single parent deduction. This way, the state intends to provide financial aid to all single parents by allowing them to pay significantly less tax and ultimately receive a higher net salary.

Not everyone can benefit from tax class 2. The requirements are very specific – it is reserved for people raising at least one child alone who lives in the same household. This means one must be a single parent whose children have not yet reached the age of 18, unless they are continuing their education. Additionally, the child must be registered under the same address as the parent in question.

Tax class II and child allowance

If one is a single parent and assigned to the 2nd tax class, numerous benefits can be utilized – in this regard, it is one of the most advantageous tax classes.

Tax class and child allowance

One of the possible benefits is the child allowance – a tax-free amount for care, education, and training, totaling 4,770 euros per child.

Additionally, only tax class 2 allows the single parent allowance of 4,260 euros plus 240 euros for each additional child.

Tax class II – deductions

The deductions in the 2nd tax class are related to income-generating costs – there is an option to claim a flat rate of 1,230 euros. The flat rate for special expenses is 36 euros per year.

The income tax for class 2 is no different from other classes – it remains progressive – the lowest tax rate is 14% and can rise to 42% depending on income. Of course, one also qualifies for the basic allowance, which is currently 12,084 euros – this is the amount that can be earned without having to pay taxes on it.

Tax class II – requirements to be met

Given the advantages described above, many wonder how to enter the 2nd tax class. This is automatically assigned if the tax office determines that all criteria are met. Even if someone is a single parent with one or more children, there are some additional requirements.

First, one must be unmarried – for tax purposes, this means no joint assessment is possible. This applies to divorced, widowed, single, or permanently separated persons.

At least one child must live in the household of the taxable person, and there must be an entitlement to child benefits. A person is considered to be ‘living in the household’ if they are registered at the same address as the main or secondary residence.

There may be no other adult resident or registered person living in the household of the taxpayer (a shared household cannot be assumed). Therefore, it is not possible to benefit from the privileges of the 2nd tax class if living with a partner under one roof.

Application for tax class II – how does it work?

Switching to the 2nd tax class brings many advantages, so it is in the interest of those affected to receive it as soon as possible. If the requirements are met, submitting the appropriate application to the tax office is sufficient. Suitable documents must be attached to the application, confirming the status as a single parent, such as the child’s birth certificate and a residence confirmation.

After the application is submitted, the tax office assesses the individual situation. If all criteria are met, the allocation to the 2nd tax class occurs. Informing the employer is not necessary by the taxpayer, as the tax office takes care of this and makes changes regarding the salary and taxes.

Tax class for two part-time jobs

Do tax classes apply if you have two part-time jobs (mini-jobs)? Yes, tax classes apply to all employment income, regardless of whether you work full-time or part-time. With two part-time jobs, the tax classes remain relevant.

Is it worth filing a tax return for tax class II?

Classification into tax classes is an important part of the German tax system. The tax class for single parents can be very advantageous. Therefore, it is advisable to consult a tax expert to ensure that all available benefits and services are utilized. Regardless of the decision – support is provided by Taxando. The app for tax returns is a fast and convenient way to file a tax return in Germany.