1. ELStAM Procedure and Tax Class
The ELStAM procedure ensures that employers always use the current and correct wage tax deduction features for their employees. These include, among others, the tax class, child allowance, and religious affiliation. Changes to the tax class must be applied for by the employee directly at the responsible tax office (Finanzamt). The tax office updates the data, which is then transmitted to the employer via the ELStAM system.
2. Correction of an Incorrect Tax Class
If an employee has been billed using an incorrect tax class, a correction is only possible if an official document or confirmation from the tax office is presented that proves the correct tax class. Such proof may be necessary if:
There was an error in the recording or transmission of the data.
The employee requested a change, but it was not entered into the ELStAM system in time.
Without this written confirmation from the tax office, an adjustment of the tax class by the employer is not permitted, as only the tax office is authorized to change the tax class and update this information in the ELStAM system.
3. Restrictions after the Close of the Tax Year
The tax year is closed after the final payroll run for the month of December. With the closing of the tax year, the possibility of making tax class changes for the previous year ends. Once the year is closed, employers can no longer make corrections to the tax class.
4. Corrections via the Income Tax Return
If an incorrect tax class was applied during the year and the deadline for changes by the employer has passed (i.e., after the final December payroll), the employee has the option to make corrections as part of their annual income tax return (Einkommensteuererklärung). In this process, the tax office checks:
Whether an incorrect tax class was used.
Whether overpaid wage tax can be refunded.
Whether there are any additional tax demands if too little tax was paid.
The tax office performs a detailed calculation of the tax liability, taking into account the actual circumstances of the taxpayer, including the correct tax class and any other deductible items.
Important Notes for Employees
Immediate Notification of Changes: Employees should immediately report changes in their personal circumstances (such as marriage, the birth of a child, or divorce) to the tax office so that these can be reflected in the ELStAM system.
Proof in Case of Discrepancies: In the event of discrepancies or problems with the tax class, it can be helpful to proactively contact the tax office and request written confirmation of the correct data.
Summary: It is crucial that employees initiate changes directly with the tax office, as employers are only permitted to use the data transmitted through the ELStAM procedure. Once the year is closed, corrections via the employer are no longer possible, and any adjustments can then only be made via the tax return.