Tax class IV (Steuerklasse 4) applies to married employees and registered civil partners when both work and have not chosen the III/V combination. Each partner is taxed like a single person – but the income splitting benefit applies at annual settlement.
Tax class IV vs. III/V combination
- Class IV/IV: fair distribution, few year-end settlements. Recommended for similar incomes.
- III/V combination: advantageous when one partner earns much more, but frequent year-end settlements.
Tax class IV with factor
The IV/IV with factor option adapts monthly deductions to the household's actual tax burden. This avoids the disadvantages of class V and large year-end settlements.
Sources: § 38b EStG, BMF.