Parental Benefits (Elterngeld) Reduces Private Deductibles
Paying alimony and support can be conceptually deducted as extra ordinary expenses. As the law determines, the deductible amount of alimony and / or support will be reduced by the amount the beneficiary earns. Does the received Elterngeld count as income in this regard? The tax court of Münster / Westpfahlen had to answer that question with its judgment of November 16, 2015 (re 3 K 3546/14 E).
In the ruled case, Jack was paying Jill, his girlfriend and mother of their joint child, alimony. Jill received about € 650 of Elterngeld a month. In his tax return, Jack claimed extraordinary expenses for these payments. He was convinced that only such benefits would be deducted from his payments that exceeded basic value of € 300. The tax office did not agree with his opinion and deducted in full. Therefore, Jack had to take this to court.
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The fiscal court agreed with the tax office. The basic amount of the parental benefits does reduce the amount of deductible support. Even though Elterngeld covers many policies in regards to families and society, the core idea is that of an income replacement.
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