Tax Allowances for Children
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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). Until a child turns 18, all parents are entitled to child allowances without conditions. After the child’s 18th birthday, the allowances may under certain circumstances continue until the child turns 25, for example if your child is undertaking vocational training. The tax-free child allowance is 5,172 euros for 2020. For 2021, it will be 5,460 euros. Each parent is entitled to half of this amount. Single parents, under certain circumstances, are entitled to the full child allowance.
There is also an additional tax allowance for childcare, education or vocational training needs. This allowance amounts to 2,640 euros for 2020. From 1 January 2021, it will be 2,928 euros. Once again, both parents are generally 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.
Granting the tax allowances for children lies within the responsibility of the tax office. When assessing income tax, it checks which option is most favorable. If child benefit amounts to 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 websites of the Federal Ministry for Family Affairs and the Familienportal (family portal). Please also use the online info tool of the Federal Ministry for Family Affairs. By entering a few details, you can find out which family benefits you may be eligible to receive.