Mandatory assessment due to receipt of short-time allowance

Anyone who received short-time allowances and other wage replacement benefits of more than 410 euros last year must file an income tax return this year.

Short-time allowance is tax-free as a wage replacement benefit, and this also applies up to a certain level to employer subsidies for short-time allowance. However, such wage replacement benefits are subject to the progression proviso. This means that these benefits are included in the calculation of the individual tax rate. Although this tax rate is only applied to the actual taxable income, it results in a higher tax rate for this taxable portion of the income, and this can lead to additional tax payments.

In order for the tax office to be able to check whether an additional payment is due, employees must submit an income tax return if they received wage replacement benefits totaling more than 410 euros in the past calendar year. The receipt of short-time allowance may therefore result in many employees being required to file an income tax return for the first time in 2021. Without a tax advisor, this tax return must be submitted to the tax office by August 2, 2021.