The annual pension adjustment means that some pensioners suddenly have to pay taxes. This table shows whether this also affects you.
It’s actually good news: As of July 1, 2024, pensions in Germany will rise by 4.57 percent – for the first time uniformly in East and West. But unlike retirement, where part of the pension remains permanently tax-free, every pension increase must be 100 percent taxed.
For some people, this means they have to pay more taxes than they did the year before, or they become liable to pay taxes in the first place. According to the Federal Ministry of Finance, the latter applies to 114,000 pensioners this year. So your taxable portion of your pension is above the basic allowance of 11,604 euros. But when exactly does this happen?
Which pensioners slip into tax liability
The consumer portal “Finanztip” has calculated when pensioners who only receive the statutory pension will be liable to tax in 2024. For example, anyone who retires in 2024 and only receives a maximum of 16,434 euros in statutory gross pension this year does not have to submit a tax return or pay taxes. For older age groups, higher amounts are tax-free, depending on the year in which retirement begins. For old pensioners in the West (started before 2005) it is still more than 21,700 euros. Read here exactly how pension taxation works.
You can see what applies to you in the following table. For married couples and registered life partners who file a joint tax return, double the amounts apply.
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Important to know: Just because you become liable to pay taxes does not mean that you actually have to pay taxes. You may still be able to deduct some expenses or claim flat-rate amounts – for example due to a disability or high medical costs. Read here what pensioners can deduct from their taxes.
In any case, you must submit a tax return as soon as you exceed the amounts listed above. If the tax office then determines that you have enough deductible expenses so that you do not have to pay taxes, you may be able to be exempt from the tax obligation for future years.
When you are threatened with high back payments
If you don’t submit a tax return after you retire despite being obliged to pay taxes because you didn’t have to do so in your working life as an employee, you may only receive mail from the tax office after a few years – and then have to make large additional payments in one fell swoop.
So it’s better if you act directly. The likelihood that you will actually have to pay taxes is particularly high for those pensioners whose personal circumstances have changed. This applies, for example, if your partner has died or if additional income arises, for example from renting and leasing or capital assets.
