Protected assets of the maintenance recipient

The claimants claimed maintenance payments to their son, who was of legal age and no longer entitled to child benefit, for the period from 1 January to 30 September 2019 (completion of his studies) as extraordinary expenses in accordance with Section 33a para. 1 sentence 1 of the German Income Tax Act (EStG). The son's bank account showed a credit balance of € 15,950 on 01.01.2019. This included an advance maintenance payment of € 500 made at the end of December 2018 for January 2019. The tax office (FA) refused to deduct the maintenance payments as extraordinary expenses as the son had sufficient assets of his own. According to the income tax guidelines and the established case law of the BFH, this is to be assumed if the assets exceed the limit of € 15,500. The tax court (Finanzgericht, FG) followed the view of the FA and dismissed the claim.

The BFH overturned the previous decision and essentially upheld the claim. It first clarified, in agreement with the tax court, that the amount of protected assets of € 15,500, which has remained unchanged since 1975, should not be adjusted despite the devaluation that has occurred since then. Protected assets in this amount were still well above the basic tax-free allowance in 2019 (€9,168 in 2019) and did not fall below the assets that civil and social law allow the needy to have as a "nest egg". However, the BFH did not follow the tax court in the calculation of assets. The claimants' monthly maintenance payments were not immediately included in the calculation of assets. In principle, maintenance payments that have been saved and not yet consumed only become (deductible) assets after the end of the calendar year in which they are received. The advance maintenance payment for January 2019, which is only deemed to have been received in 2019 in accordance with Section 11 EStG, should therefore not be included in the assets as at 01.01.2019. At this point in time, the son's (harmless) assets were therefore assumed to amount to € 15,450, which had not increased above € 15,500 in the period in question.