Tax bracket by death: What widows and widowers need to know

Understanding tax changes following a death

Losing a loved one involves not only emotional challenges, but also many organizational and financial issues. One of the most important changes concerns the survivor's tax bracket.

What happens to the tax bracket after the spouse dies?

• Automatic classification in tax class 3 in the year of death and in the following year
• This is followed by the change to tax class 1 (for single people) or tax class 2 (for single parents)
• An adjustment is made automatically by the tax office, but can also be applied for independently

Why is it important to take care of the tax bracket early on?

• An incorrect tax bracket can lead to high back payments or financial disadvantages
• Timely adjustment makes optimal use of tax benefits
• Certain allowances and reliefs can only be applied for within certain time limits

What tax bracket do widows and widowers receive?

After the death of a spouse, the tax bracket changes automatically. Which tax bracket applies to you depends on various factors, including when you die and your personal situation.

Automatic changeover to tax class 3

• In the year of death and in the following calendar year, the surviving person is automatically classified in tax class 3.
• This regulation applies regardless of previous income or previous tax bracket.
• Tax class 3 initially offers tax advantages, as it allows a higher basic allowance and lower deductions.

How long does tax class 3 apply?

• The classification in tax class 3 remains in place until the end of the calendar year following the year of death.
• The automatic change to tax class 1 then takes place, unless there is a claim to tax class 2.

Switching to tax class 1 or 2 — when and for whom?

• Tax class 1: Applies to widows and widowers without dependent children after expiry of the special scheme.
• Tax class 2: Can be applied for if the surviving person has a child for whom they receive child benefit or a child allowance.

Special cases: Tax class 6 and its meaning

• Tax class 6 only applies to employees with a second income or an additional income tax card.
• Survivors who have a secondary job in addition to their main job should check which tax class combination makes the most sense for them.

Important: The tax bracket significantly influences the amount of tax deductions. If you are unsure, seek advice early on to avoid financial disadvantages.

Change tax bracket: deadlines, procedure and required documents

After the death of a spouse, the tax bracket initially changes automatically. However, it may be necessary to make an adjustment, in particular if a change to tax class 2 is an option or if there are special tax circumstances.

Who must apply for a change in tax bracket?

• In most cases, the tax office automatically switches from tax class 3 to 1.
• However, a change to tax class 2 (for single parents) must be actively applied for.
• If your personal or professional situation changes (e.g. as a result of a new marriage or a secondary job), you must adjust the tax bracket yourself.

Which documents are required?

To change the tax bracket, you usually need the following documents:

• your identity card or passport
• Your deceased spouse's death certificate
• An employer's income tax certificate (for employees)
• For tax class 2: proof of child benefit or child allowance

Deadlines and important deadlines that you should keep in mind

• The automatic classification in tax class 3 ends at the end of the calendar year following the year of death.
• The application for tax class 2 should be submitted no later than 30 November of the year in which the automatic changeover to tax class 1 takes place.
• A retroactive change is only possible in certain cases and should be discussed directly with the tax office.

This is how re-registration at the tax office works

1. Fill out the form: You can obtain the appropriate tax class change form from the tax office or online.
2. Submit documents: Submit the form together with the required documents in person, by post or online.
3. Wait for processing time: Processing usually takes a few weeks. The new tax bracket will be included in the next payslip.
4. Review of the new tax bracket: Review your payroll and tax return to ensure that the change has been implemented correctly.

Note: If you are unsure which tax bracket is best for you or how to make the change, tax advisors or the tax office will be happy to advise you.

Tax advantages and disadvantages for survivors

After the loss of a spouse, not only does the tax bracket change, but also tax obligations and opportunities. Survivors should find out about their options at an early stage in order to avoid financial disadvantages and take advantage of potential relief.

Relief amount for single parents (tax bracket 2)

• Widowed parents can switch to tax bracket 2 if they have a child in their household for whom they receive child support or a child allowance.
• In addition, a Relief amount of currently 4,260€ per year granted (as of 2024).
• The application for tax class 2 must be actively submitted, as the changeover is not automatic.

advantage:

Lower tax burden for single parents

Disadvantage:

Claim expires as soon as there are no more children eligible for child benefit living in the household

Joint investment and widow splitting — is it worth it?

• In the year of death and in the following year, a joint investment take place.
• The income is distributed as if the spouse were still alive (“widow splitting”).
• In many cases, this results in a lower tax burdenbecause the splitting tariff is cheaper.
• After expiry of this period, the Individual assessment, which often results in higher tax deductions.

advantage:

Tax savings in the first two years after death

Disadvantage:

Thereafter, often higher tax burdens due to individual assessment

Tax pitfalls that should be avoided

• Don't apply for tax class 2 in time: If you have a child in the household, a late application may result in financial disadvantages.
• Forgot to use the widow splitting benefit: Anyone who does not apply for a joint assessment may be giving away tax benefits.
• Underestimated tax burden after switching to tax class 1: Many survivors only realize when they file their tax return that they have to pay more tax. Early planning helps to avoid surprises.