Overview
- The Federal Ministry of Finance has revived a plan to abolish tax classes III and V and automatically move married partners into the factor variant of tax class IV.
- Finance Minister Lars Klingbeil confirmed the proposal Thursday, saying the change would keep the Ehegattensplitting in place but shift how monthly net pay is distributed between partners.
- The ministry argues the switch would remove perverse incentives that discourage the lower‑earning spouse from increasing work hours and would prevent very high monthly deductions for that partner.
- Officials expect a drop in paperwork because about 12 million couples now using III/V must file mandatory tax returns, a burden the ministry says the reform would reduce.
- The plan is under discussion between the federal government and the states and could be included in a 2027 tax‑simplification law, but it faces strong opposition from Bavaria’s CSU and parts of the Union and is not settled.