Flat-Rate Care Allowance: Retroactive Consideration

A taxpayer may claim a flat-rate care allowance as an extraordinary expense for the care of a close relative (e.g., a parent) instead of claiming actual expenses (Section 33b(6) of the Income Tax Act (EStG)). One of the requirements is that the taxpayer personally provide the care either in his or her own home or in the home of the person requiring care and receive no payment for doing so. The flat-rate care allowance amounts to

and is also granted if the person receiving care is considered helpless within the meaning of § 33b, paragraph 3, sentence 4 of the Income Tax Act (EStG). In the case of Initial determination, change, or revocation of the care level During the calendar year, the flat-rate care allowance shall be granted based on the highest level determined during that calendar year. 

Practical example:
Due to progressive dementia, the mother has required long-term care since 2025 and was classified as care level 3 by a medical service. The daughter took on the primary responsibility for her mother’s care at home and received no income for this. In 2026, she filed her 2025 tax return. She did not include any information regarding the flat-rate care allowance. After the 2025 income tax assessment became final, the daughter retroactively submitted the certificate confirming her mother’s care level 3 and requested an amendment to the income tax assessment to recognize a flat-rate care allowance.

Pursuant to § 175(1), first sentence, No. 1 of the German Fiscal Code (AO), a tax assessment notice may be amended if a preliminary assessment notice—which is relevant to the determination of the tax assessment notice—is issued or amended. A “basic decision” is any decision that is binding for the assessment of the tax. This also includes the Notice of Classification into a Care Level, which is decisive for the granting of a lump-sum care allowance. The subsequent notice must then be issued within the assessment period to align with the basic decision, if the findings set forth in the preliminary decision were not taken into account or were not accurately considered. This applies if 

• the preliminary decision was issued only after the subsequent decision had been issued, 
• the initial decision was overlooked when the subsequent decision was issued, or
• if the initial decision was already in effect when the subsequent decision was issued, but the findings in the initial decision were taken into account incorrectly.

The fact that the taxpayer did not file the application required for the tax benefit—which is not subject to a deadline—until after the tax assessment had become final does not preclude an amendment to the subsequent assessment (see BFH ruling of Dec. 13, 1985, III R 204/81).

Unlike the disability allowance, the long-term care allowance under Section 33b(6) of the Income Tax Act (EStG) requires, in addition to the long-term care level, Additional Requirements must be met in order to receive the tax benefit. In legal proceedings before the Düsseldorf Fiscal Court, the tax office therefore argued that a change would only be possible if, when alone the preliminary assessment notice is decisive for determining the tax base. However, this is not the case with regard to the inclusion of a flat-rate care allowance, because additional requirements must be met under § 33b(6) of the Income Tax Act (EStG). Therefore, information regarding this matter should have been provided in the income tax return.

But: The Düsseldorf Fiscal Court takes a different view. The income tax assessment can be amended because the Notice of Classification into a Care Level is sufficient as a preliminary decision. The fact that the binding findings in the preliminary decision relate only to a single requirement (namely, the care level) does not preclude an amendment. The Düsseldorf Fiscal Court has granted leave to appeal (BFH Case No.: VI R 19/25)