The Solli: A Tax on High Earners
In 2026, the 'Solidaritätszuschlag' (Soli) of 5.5% of your income tax is only paid by individuals earning over approx. €68,000 (single) or €136,000 (married). For US expats, the Soli is considered an income tax and is **fully creditable** on Form 1116. This helps increase your available Foreign Tax Credits to offset US tax on your German salary. Visit the Federal Finance Ministry for the current 'zero zone' thresholds.
Corporate Soli
While most individuals are exempt, companies (GmbHs) still pay the Soli on all profits. If you own a German company, this is a key factor in your GILTI and FTC calculations.
Soli and the FTC 'Basket'
The Soli is added to your 'Einkommensteuer' for the purpose of the Foreign Tax Credit. Total Credit = Einkommensteuer + Soli. LSI keywords include 'Solidaritätszuschlag,' 'General Category Income,' 'Form 1116,' 'High Income Threshold,' and 'Abgeltungsteuer.' Refer to IRS Foreign Tax Credit info. In 2026, there are ongoing legal challenges to the Soli in the German constitutional court. If it were eventually found unconstitutional and refunded, US expats would be required to file a 'Notice of Foreign Tax Redetermination' with the IRS and potentially pay back some US tax. For now, the ELSTER portal calculates this automatically based on your taxable income. If you are close to the threshold, a small contribution to a pension or a work-related expense can drop you into the 0% Soli zone.