SteuerGo FAQs

Who is entitled to the widow's pension splitting (grace splitting)?

After the death of a spouse, many face financial and tax challenges. The so-called widow's allowance (grace allowance) helps during this difficult time by allowing the tax splitting rate in the year following the death. But who is entitled to the widow's allowance and how exactly does this special tax regulation work?

Conditions for the widow's allowance (grace allowance)

Who is entitled to the widow's allowance is clearly regulated. For the tax authorities to recognise the grace allowance, the following conditions must be met:

• At the time of death, the conditions for joint assessment must have been met. This means: Both spouses had their residence in Germany and were not permanently separated.
• A separation before the death of the spouse excludes the widow's allowance – even if a joint assessment was made for the year of death.

Important: Even the actual separation of the spouses before the death means that there is no entitlement to the widow's allowance. Mere joint assessment in the year of death is not sufficient (BFH ruling of 27.2.1998, BStBl. 1998 II p. 350; H 184a EStR).

How does the widow's allowance work in practice?

After the death of the spouse, the surviving spouse is assessed individually in the following year – in accordance with § 25 EStG.

However: Once and for the last time, the splitting rate is applied in the year after the death – even though it is formally an individual assessment. This is regulated in § 32a para. 6 no. 1 EStG.

Those entitled to the widow's allowance benefit from the more favourable tax classes and a reduced tax rate – and are thus not immediately financially burdened after the loss.

Purpose and advantage of the widow's allowance

The purpose of the widow's allowance (grace allowance) is to reduce the tax burden of the surviving spouse in the first year after the partner's death. Without this regulation, the switch to individual assessment would immediately lead to higher taxes – an additional hardship in an already stressful situation.

With the widow's allowance, the surviving spouse initially remains in a more favourable tax position, leaving more financial leeway for reorientation.

Conclusion: Who benefits from the widow's allowance?

In summary: Those entitled to the widow's allowance must have been in a legally recognised marriage at the time of death, without permanent separation. In the first year after the death, the splitting rate is granted for the last time – an important tax concession in a difficult phase of life.

Tip: SteuerGo automatically takes the widow's allowance (grace allowance) into account once the conditions are met. It is still worth checking the details in the tax assessment notice carefully.