SteuerGo FAQs

(2023) Is it possible to transfer the child allowance / BEA allowance to another person?

In certain cases, you can transfer your half of the child allowance and the half allowance for care, education, or training needs (BEA allowance) to the other parent. This is possible if you are not married, permanently separated, or divorced. However, a mutual agreement is not sufficient.

You, as the custodial parent, can apply for the transfer of the child allowance if the parent obliged to pay maintenance does not fulfil their maintenance obligation to at least 75 per cent. In this case, you will receive not only the full child allowance but also the full BEA allowance automatically. Since 2012, the allowance can also be transferred if the other parent is not obliged to pay maintenance due to lack of financial capacity. If you are forced to support the child alone, you are also entitled to the full child and BEA allowance.

Regardless of the maintenance issue, the child allowance can also be transferred if one parent lives permanently abroad or if their residence is unknown.

The BEA allowance can also be transferred. However, due to a Federal Fiscal Court ruling and a subsequent change in the law, the transfer of the BEA allowance has become very complex.

The previous administrative practice was that for both minor and adult children, the BEA allowance followed the transfer of the child allowance. The practical case was often as follows:

The child lives with parent Anna; parent Bruno does not pay maintenance and does not particularly care for the child. Parent Anna is therefore entitled to both allowances in full upon application.

However, the Federal Fiscal Court ruled that the BEA allowance to which parent Bruno is entitled in principle - after the child reaches adulthood - cannot be transferred to Anna even in the event of a breach of maintenance obligations. This means that the single parent is denied half of the BEA allowance for the adult child, even though they bear the child's maintenance costs alone (BFH rulings of 22.4.2020, III R 61/18 and III R 25/19). This seems unfair, and the legislator has responded: With an amendment to § 32 paragraph 6 sentence 6 EStG, it has been stipulated that the transfer of the child allowance always also leads to the transfer of the BEA allowance - but only from 2021 onwards.

Up to this point, it is already quite complicated. But it gets even more complicated! Because the legislator has not changed sentence 9 of § 32 para. 6 EStG, which states: "A transfer .... is excluded if the transfer is objected to because the parent with whom the child is not registered bears childcare costs or regularly cares for the child to a significant extent."

This means that although the transfer of the child allowance by legal fiction (§ 32 para. 6 sentence 6 EStG) always also leads to the transfer of the BEA allowance, the possibility of objection for minor children remains. But which case is affected by this?

 

 

The question is when care is provided "to a significant extent". The law does not further explain the criterion of regular care "to a significant extent". However, the Federal Fiscal Court has clarified what is meant by care "to a significant extent":

• This is the case if the time spent caring for the child by the parent obliged to pay maintenance amounts to an average of 10% per year, with other indicators in this case regularly being negligible (BFH ruling of 8.11.2017, III R 2/16).

• According to the Federal Fiscal Court, the extent of care requires an overall assessment taking into account all objective circumstances of the individual case. The assessment may depend on a variety of factors that naturally vary in weight depending on the circumstances of the case. These include, in particular, the frequency and length of contact between the objecting parent and the child, which are themselves influenced by the child's age and the distance between the parents' residences. For reasons of simplification, the Federal Fiscal Court arrives at the aforementioned limit of 10% for the time spent caring for the child.

If the child lives with grandparents or a stepparent, the child allowance and BEA allowance can also be transferred to them. This requires the application of one parent. This transfer can be revoked at any time with regard to future years. Parents who are jointly assessed may only transfer allowances to the grandparents together. In this case, please enclose the "Form K" with your tax return.