In 2024, significant tax modifications are planned for Germany, providing a chance for employees to earn additional funds from the government in specific situations. This small but advantageous gift from the state aims to assist in the growth of personal wealth for citizens.
The eligible individuals for these benefits have, so far, been predominantly low-income earners. However, these qualification limits will double from 2024, allowing an additional 14 million employees to apply for the benefit along with their tax declarations.
To secure these benefits, the process is straightforward. During tax declaration filing, simply check the box labeled "Determination of savings benefits for the employee" on the main form (cover sheet). Then, enter a "1" next to this box for yourself and your partner, if applicable, in line 42.
The government will contribute up to 20% of the annual amount for equity capital funds, up to 400 euros, and 9% for building savings contracts, up to 470 euros. Employees utilizing both forms of investment can receive supplements for both, with a maximum of 80 euros for equity capital funds and 43 euros for building savings contracts.
Though the amount may seem modest, many individuals will appreciate the extra funds. Pensioners in Germany might also become eligible for these tax changes, according to expectations, as the eligibility criteria for these benefits are expected to expand in 2024.
Furthermore, if you're a pensioner eager to reap the benefits of these tax modifications, you should:
- Keep tabs on the proposal's progress within the Bundesrat.
- Ensure your pension income does not exceed EUR 2,000 to remain eligible for the tax exemption.
- Monitor legal developments and stay informed through government sources.
- Consider consulting financial advisors or tax experts for expert guidance.
- Stay updated on the application process once it's available.
