Tax Allowances for Children
Income is untaxable up to a child’s minimum subsistence level and this principle is ensured either through child benefit or tax allowances for children (Freibeträge für Kinder). All parents are entitled to tax allowances without conditions until a child turns 18. After the child’s 18th birthday, the allowances may continue under certain circumstances until the child turns 25, for example if your child is undertaking vocational training.
The tax-free child allowance was
- 4980 euros for 2019, and will be
- 5172 euros for 2020 and
- 5460 euros for 2021.
Each parent is entitled to half of this amount. Under certain circumstances, single parents are entitled to the entire amount. There is also an additional tax allowance for childcare, education or vocational training needs totalling 2928 euros. Here again, both parents are normally entitled to half of this amount. If you are bringing up a minor on your own, you can apply to have the other parent’s share transferred to you.
The tax office decides whether to grant the tax allowances for children. When assessing income tax, it checks which option is most favourable. If child benefit is worth less than the tax relief provided by the tax allowances for children, these allowances less the child benefit you have already received are deducted from your taxable income.
Further detailed information on the individual benefits and assistance available can be found on the website of the Federal Ministry for Family Affairs and the Familienportal. You can also use the online tool provided by the Federal Ministry for Family Affairs. This allows you to enter a few details and find out which family benefits you may be eligible to receive.