- Lindner: Disadvantages for couples "100 percent excluded"
German Finance Minister Christian Lindner (FDP) has reassured couples that the planned abolition of tax classes 3 and 5 will not result in any financial disadvantages for them. "It is 100 percent certain that couples will not be worse off," Lindner told the Funke media group newspapers. "In particular, the marriage allowance will not be abolished, as that would be a significant tax increase."
The federal government decided at the end of July to abolish the popular tax classes 3 and 5 for couples. Instead, partners will automatically fall into tax class 4 using the so-called factor procedure from 2030. The tax office will then calculate exactly who contributes what to the net income. The burden of income tax will be distributed more fairly between spouses and registered partners. However, the overall tax burden for couples will not change.
Lindner pointed out that couples do not need to take any action at the moment. "But those who want to can already discuss today how a fair distribution of the tax liability looks like. Because tax class 4 with the factor procedure already exists," said the finance minister. With tax class 4 with the factor procedure, the tax burden would be distributed proportionally, and the often troublesome year-end payments to the tax office would also be eliminated.
Most couples currently choose tax classes 3 and 5. This is shown by the data from the wage and income tax statistics for the tax year 2020, as recently reported by the Federal Statistical Office.
According to this, out of the approximately 5.3 million married couples and registered partners who were jointly assessed with only income from non-self-employed work, around 2.1 million chose this tax class combination. This corresponds to a share of 39 percent.
In the case of a further 1.3 million couples (25 percent), only one of the two persons had employment income and was therefore assigned to tax class 3. 1.9 million jointly assessed taxable persons were registered in tax class 4. With a share of 36 percent, this choice was only just behind the combination of 3 and 5.
The federal government's decision to abolish tax classes 3 and 5 from 2030 for couples has sparked concerns about potential financial implications. However, German Finance Minister Christian Lindner has assured that there will be no financial disadvantages for couples, as the marriage allowance will remain intact.
Despite the significant number of couples currently opting for tax classes 3 and 5, the overall tax burden for couples is not expected to change due to the abolition and the introduction of the factor procedure in tax class 4.
