Did you receive unemployment benefits or Bürgergeld (citizens' income) last year and now wonder if you need to file a tax return? Don’t worry – we’ll explain in a simple and clear way what you need to know and how to enter this information in the Taxfix app.
- Unemployment Benefit I (ALG I) is tax-free but affects your tax rate.
- You must file a tax return if you received more than €410 in replacement income per year.
- Bürgergeld does not need to be included in your tax return.
🚀 Your Guide
- What applies to Unemployment Benefit I (ALG I)?
- How to enter ALG I in the Taxfix app
- What applies to Bürgergeld (formerly ALG II)?
What applies to Unemployment Benefit I (ALG I)?
Unemployment Benefit I (Arbeitslosengeld I / ALG I) is considered a replacement income. This means you don’t have to pay income tax on it – it is tax-free.
However, ALG I is subject to the progression clause. This means your personal tax rate for your other taxable income increases. The tax office considers ALG I when calculating your tax rate. As a result, you may pay more tax on your remaining income.
📌 Important: If you received more than €410 in replacement income (e.g. ALG I, parental allowance, or sick pay) during the year, you are required to file a tax return.
💡 Example of the progression clause:
Let’s say you earned €15,000 in regular taxable income. In addition, you received €9,000 in ALG I. The ALG I itself is tax-free, but it is used to calculate your tax rate. Without ALG I, your tax rate might be 7.23%. With ALG I, it rises to 14.30%. As a result, your income tax increases from €1,085 to €2,145.
How to enter ALG I in the Taxfix app
If you received Unemployment Benefit I, you can enter the total amount in the "Income" category in the app. You’ll find the relevant question under:
“Did you receive or repay any of the following benefits in 20XX?”
💡 Tip: You’ll find the exact amount on the certificate issued by the Employment Agency. These figures are also automatically transmitted to the tax office – but you still need to include them in your tax return.
Total amount of replacement income
For your tax return, the total amount paid out during the year is what matters – regardless of which months the payment covers. Only the actual date of payment counts.
The agency that paid the benefit (e.g. the Employment Agency) provides a certificate listing all payments made. This is the total amount you need to enter in the app.
⚠️ If you repaid any amount in the same year (e.g. due to overpayment), enter that amount with a minus sign (–).
👉 You should always enter the gross amount – that is, the amount before social security deductions.
😇 Not sure what to enter? You can contact the authority that paid you the benefit. Alternatively, your local tax office can also help. And don’t worry: If you enter the wrong amount, the tax office will automatically correct it – this might simply lead to a different final result.
What applies to Bürgergeld (formerly ALG II)?
Bürgergeld (formerly Unemployment Benefit II or Hartz IV) is also tax-free – and not subject to the progression clause. You do not need to declare this income in your tax return, and it is not requested in the Taxfix app.
👉 Summary:
- ALG I is tax-free but increases your tax rate. Tax return is mandatory if you received more than €410.
- Bürgergeld is tax-free and not relevant for your tax return.
Still unsure whether you need to file a return? Then use the Taxfix app – it will guide you step by step. And if you need help, our support team is here for you! 😊
🚀 Fill out the simple question-answer flow - we'll take care of the rest!
Still have questions?
We're here to help! Contact our support team