You have received unemployment benefits and are unsure whether you now have to file a tax return? We have summarised for you what you need to consider and how you can declare the unemployment benefit in the Taxfix app.
- I have received unemployment benefit I
- How can I declare unemployment benefit I in the Taxfix app?
- I have received Bürgergeld / unemployment benefit II
I have received unemployment benefit I
Unemployment benefit I (Arbeitslosengeld I / ALG I) is one of the so-called wage replacement benefits. These are tax-free, i.e. no income tax is due on them.
However, wage replacement benefits, and thus also ALG I, are subject to the progression proviso (Progressionsvorbehalt). This increases the tax rate on your taxable income. In other words, the tax office regards wage replacement benefits as an increase in your financial strength and applies a higher tax rate to the rest of your taxable income.
Since wage replacement benefits are subject to the progression clause, you have to file a tax return if your total annual income from wage replacement benefits exceeds 410 euros.
What is the effect of the progression clause? An example:
You are in tax class 1 and have earned 15,000 euros in 2020, which you have to pay tax on. In addition, you received 9,000 euros in unemployment benefit I from 1 April to 30 September. The unemployment benefit itself is not taxed, but is included in the tax rate.
This increases your tax rate from 7.23% to 14.30%. Your 15,000 euros are taxed at this rate. This increases your income tax from 1,085 Euros (without progression through ALG I) to 2,145 Euros (with progression through ALG I).
How can I declare unemployment benefit I in the Taxfix app?
If you received unemployment benefit I, you can enter it in our app in the category "Income". Please enter the total annual amount here.
You can find the amounts received for unemployment benefits on the certificate from the Employment Agency. The data is also sent to the tax office at the same time.
I have received Bürgergeld / unemployment benefit II
Unemployment benefit II, or Bürgergeld, is tax-free and is not subject to progression. Therefore, you do not have to enter this benefit in your income tax return and it is not queried in the Taxfix app.