What is the current status of the Solidaritätszuschlag (Soli) in 2024?

The Solidaritätszuschlag continues to apply in 2024 but only affects a small fraction of German taxpayers following the reforms that took effect on 1 January 2021. As of 2024, the Soli is charged only when an individual's assessed income tax liability (not income, but tax) exceeds €18,130 per year for a single filer, or €36,260 for jointly assessed couples. The German government estimates fewer than 10% of taxpayers now pay any Soli.

The Soli rate remains 5.5% of income tax. A mitigation zone (Milderungszone) between the lower threshold and a higher ceiling ensures the transition is gradual rather than a sudden step. Within the Milderungszone, the Soli is limited to 11.9% of the difference between actual income tax and the lower threshold, rather than the full 5.5% of all income tax.

Multiple legal challenges argued that the Soli is unconstitutional now that the formal reunification financial need has ended. The Federal Fiscal Court (Bundesfinanzhof) ruled in November 2023 that the Soli remains constitutional at least through 2020, leaving open whether it remains valid beyond that. The Federal Constitutional Court (Bundesverfassungsgericht) has yet to issue a definitive ruling on the post-2020 Soli. Taxpayers paying Soli who wish to preserve their right to a potential future refund should file returns with objections (Einspruch) within the statutory period, though the outcome of any challenge remains uncertain.

This is general information only, not professional tax advice. Consult a qualified tax professional for your specific situation.