Overview

• The federal CDU/CSU–SPD coalition plans to raise the commuter tax allowance to 38 cents per kilometer starting January 1, 2026.
• North Rhine–Westphalia Finance Minister Marcus Optendrenk has stated that the state will oppose the measure in the Bundesrat unless the federal government offsets state and municipal revenue losses.
• Optendrenk argues that higher tax refunds would significantly reduce regional revenues and insists the federal government should bear the financial burden of the policy change.
• The proposed reform would expand the current allowance, which applies only beyond the 21st kilometer, to cover all kilometers traveled for work.
• The standoff highlights ongoing tensions between Berlin and Germany’s states over cost-sharing for federal tax reforms.