PARENTAL SUPPORT AND TAX WRITE-OFFS

Main change: cash no longer works

From the tax period of 2025 the law explicitly requires: financial aid is accepted for deduction, only if it is transferred by bank transfer to the recipient's account. Legal provision — Section 33a para. 1 sentence 12 EStG (Income Tax Act), introduced by the Annual Tax Act 2024.

The rationale behind the bill explicitly states that the previous practice is being abolished: the recognition of cash brought along when travelling to family and of transfers via intermediaries. There are no exceptions in the law — reservations for difficult cases or for countries where there is a war are normally absent.

Two clarifications. Firstly, the rule applies only to monetary aid: in-kind aid does not fall under it. Secondly, the transfer fee is not part of the aid amount — it cannot be deducted.

About Ukraine. No special concessions regarding the payment method no. Current Ministry of Finance relief measures relating to the war concern housing, donations and employer payments, but not the maintenance of relatives abroad. What is actually provided are reliefs on evidenceIf, due to the war, obtaining a certificate from one's home country is impossible or extremely difficult, the tax authority may accept other forms of proof. However, the requirement for a transfer to a bank account remains.

The purely banking side should also be taken into account: whether a German bank will be able to execute a transfer to a specific country is a matter of sanctions law and the bank's internal rules, rather than tax law. Check this with your bank in advance.

The one-twelfth rule: transfer in January rather than December

This is the most costly mistake in practice. The maximum deduction amount is reduced by one-twelfth for each full month, in which the conditions were not met. And a separate payment covers the period from the payment date to the next payment; the last or only payment of the year — by 31 December.

To put it simply: the months until the first transfer they don't count towards the deduction, no matter how much you transfer.

A clear-cut example from the Ministry of Finance's clarifications: translation 3.000 € mothers with a write-off on December 23rd give a deduction around €515 — one twelfth of the annual limit. The remaining €2,485 are not taken into account either this year or next year.

Conclusion: If you help regularly, make the first transfer in January. If you can only afford one transfer a year, make it as early as possible rather than around the New Year.

The outflow moment is determined by the date of the payment order (at most the date of debit from the account), and not the date of crediting to the recipient. Payments are not backdated. There is a separate rule only for a spouse: any payment is considered to cover the entire calendar year.

What else reduces the deduction

Relative's own income

The recipient's income is deducted from your limit — but not entirely: the tax-free allowance is applied first €624 a year (for countries with a half share – €312, with a quarter – €156). Flat-rate amounts are deducted from the income in advance: €102 for pensions and a general flat-rate expense allowance of €180, which, by country groups, is not being cut down.

Example for Russia, 2026. Mother receives a pension equivalent to €1,440 a year; you transfer money the whole year. Calculation: 6,174 − [(1,440 − 102 − 180) − 312] = 6,174 − 846 = 5.328 € maximum deduction.

Bear in mind: financial support from other relatives who do not pay taxes in Germany themselves is considered income for the recipient and will also reduce your deduction.

Victim threshold — the limit of your own workload

Second, independent cut-off. The tax authority proceeds from the assumption that you cannot give relatives however much you like to the detriment of your own family. Formula: 1 % for every full €500 of your available net income, up to a maximum of 50 %, minus on 5 percentage points for the spouse and for each child for whom there is an entitlement to Kindergeld (up to a maximum of 25 points in total).

An example from the Ministry’s guidance: a net income of €16,450 per year gives 32 %, minus 10 % for a wife and a child = 22 %, that is to say The Opfergrenze is around €3,619. With a typical salary, this very threshold is often lower than the national limit.

limit of sacrifice does not apply to the maintenance of a spouse — even a divorced one.

A relative's obligation to work

This condition cuts off most refusals, and almost nothing is written about it. For relatives living abroad, the tax office proceeds from the assumption that a person of working age must support themselves. The simplified presumption of neediness that applies to those living in Germany does not apply here never applies.

Valid reasons exempting from this requirement:

• reaching the state retirement age according to German rules — and that is no longer 65 years: for those reaching it in 2026, the threshold is approximately 66 years and 4–6 months, and for those born from 1964 onwards — 67 years old;
• disability or poor health;
• child-rearing or childcare under 6 years old;
• serious study or vocational training;
• looking after a relative with a disability (being available on call does not count as such).

An unemployment certificate from your home country does not constitute a valid reason this is explicitly stated in the ministry's clarifications.

If a relative is already receiving a pension, but has not reached the general retirement age, exemption is only possible in the case of a disability pension. A certificate from the attending physician indicating the illness, persistent limitations, and the extent to which the person is still capable of working will be required, with a sworn translation.

The only complete exception — supporting a spouse living abroad: their work capability is not assessed at all.

Health insurance contributions - over the limit

The limit is increased by the amount of contributions for basic health insurance and long-term care insurance for this relative. Important details: this allowance is not being cut down for a group of countries, and it is not necessary for you to be the one paying the contributions — it is enough that you fulfil the maintenance obligation. Pension and unemployment contributions go here are not included.

Disclaimer: the applicability of this rule to the insurance systems of CIS countries has no separate clarification — please check with a tax adviser.

Currency conversion

The law requires the amounts to be recalculated at the European Central Bank exchange rate. by the end of September of the previous year. The problem is that the ECB only publishes exchange rates for just over thirty currencies: the rouble has been suspended since March 2022, and the hryvnia, tenge, Belarusian rouble, lari, dram, manat and som are not on the list at all. For these countries, other official exchange rates are used in practice — check the procedure with your tax office or consultant.