Ask a tax advisor on the topic of Tax classes

WHAT TAX CLASS FOR SEVERANCE PAY?

October 28, 2015 | 25,00 EUR | answered by Peter Lipp

I have a few tax-related questions.

I will be unemployed as of 01.01.2016. My wife is still working.

I will receive a severance payment of €99,998.00 gross in January 2016 retroactively paid out according to § 34 EStG.

My wife had a gross annual salary of €42,558.00 in 2014.

We have both always been in tax class IV.

Question:

Would it be more tax advantageous if my wife switches to tax class III as of 01.01.2016 and I simultaneously switch to tax class V? Or who should switch to which tax class?

Or will the employment office assign me a tax class?

Are there any other information that should be taken into consideration?

I wish you a stress-free week and look forward to your response!

Best regards

Peter Lipp

Dear seeker of advice,

It is more advantageous to have the lower tax class when receiving a severance payment during the year. However, this advantage disappears after submitting the tax return, as all taxes paid will be credited. The tax class can be changed by submitting a request to the tax office, for which there are special forms available at the following link: https://www.formulare-bfinv.de/ffw/form/display.do?%24context=1F48B6D5041F392341E9

Therefore, for the year 2016, the choice should be Husband 3 and Wife 5.