What is important for all taxpayers in 2026

The legislator has once again made extensive changes for 2026. Whether basic allowance and deduction for maintenance expenses, child benefit and child allowance, fees for network charges, pension taxation or voluntary work - we have summarized the most important changes for you.

Basic allowance and deduction for maintenance expenses increase

In 2026, the basic tax-free allowance will rise to EUR 12,348 (EUR 12,096 in 2025). Taxpayers will not have to pay tax on income up to this amount.

The maximum amount for the deduction of maintenance expenses as an extraordinary burden will also increase to EUR 12,348 (EUR 12,096 in 2025). Anyone who supports dependent relatives can deduct maintenance payments up to this limit for tax purposes, provided that the other requirements are available.

Attention:
As of January 1, 2025, the tax office will only take cash payments into account if they are made by bank transfer to an account of the person receiving them. Cash payments or payments via payment services without a clear account allocation will no longer be recognized.

Child allowance and child benefit increase

Families can look forward to a little more money in 2026. Child benefit will rise from 255 euros to 259 euros per month per child and at the same time the Child allowance has been raised. This will now amount to 3,414 euros per parent in 2026. Together with the allowance for care, education or training needs of €1,464 per parent, this amounts to a total of €9,756 per child.

Electricity becomes cheaper

The German government has decided to reduce the grid fees for both private households and companies in 2026. These are charges for the use of the electricity grids. They are passed on to end consumers by the energy suppliers via their electricity bills.

Pension taxation - sTaxable portion of retirement income increases

In 2026, the percentage for the taxable portion of retirement income will increase again. Anyone retiring this year will have to pay tax on 84% of their retirement income. The taxable portion of the pension will increase by 0.5 percent from 2023 onwards. This means that from 2058, the entire gross pension will have to be taxed, although the basic allowance will of course be taken into account.

For all beneficiaries who receive a pension for the first time by 2057, the Tax office a „pension allowance“, i.e. the tax-free portion of the gross pension. The pension allowance is a fixed euro amount and remains unchanged in subsequent years. This also applies if the pension continues to rise as a result of pension increases. Future pension adjustments therefore increase the individual taxable pension income and are taxable in full.

Higher allowances in voluntary work

There is good news for volunteers. Commitment to sports clubs, church communities and other non-profit organizations will receive better tax relief from 2026. The lump sums are divided into two areas.

The exercise leader allowance is limited to certain educational, caring or artistic activities. It applies, for example, to trainers in sports clubs, choir leaders, tutors or people who care for sick or elderly people. In 2026, it will rise from 3,000 euros to 3,300 euros per year.

The honorary allowance mainly applies to administrative and organizational activities, for example as a club board member, treasurer or groundsman. It is more widely applicable, but the amount is lower and increases from 840 euros to 960 euros per year.

Note:
If you carry out different activities in both areas, you can use both allowances at the same time.