All employees who received more than €410 in short-time work benefits in 2020 are required to file an income tax return. The deadline for submitting the tax return ends on July 31, 2021 if there is no representation by a tax consultant or an income tax assistance association. In individual cases, however, employees affected by short-time work can still respond to the challenge of having to submit a tax return back taxes to be paid. The short-time allowance itself is considered tax-free. As a wage replacement benefit, however, it is subject to the so-called progression proviso. This means that the short-time allowance increases the tax rate that is payable on taxable income. The wage tax deducted from the gross wage is then usually no longer sufficient to settle the income tax claim in advance, which leads to additional claims from the tax office.
This article does not replace individual legal advice and only provides general information on the legal situation.
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