Status: 15.01.2024, 15:05 PM
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In the event of a separation, many parents opt for equal care in the alternating model. We show how this affects the tax bracket and allowances.
If parents separate and divorce, childcare must be arranged. In the rather rare alternating model, the child's parents alternate continuously in a certain cycle, for example weekly. The child then lives with the mother for one week and with the father the next week, and so on. If both parents look after the child equally in terms of organisation and time, this is referred to as the true alternating model. But beware, this 50:50 model is hardly taken into account in tax legislation. In a press release, the Income Tax Assistance Bavaria (Lohi) explains what parents pay attention to and what they have to arrange among themselves for a shared tax consideration.
In the case of the equal switching model, separated parents hardly receive any tax benefits. © Andreas Gebert/dpa
Tax brackets in the exchange model: Only one gets tax class II
If the parents agree on the real alternating model, there will be no parent caring for them alone. Nevertheless, only one of the two parents can apply for tax class II, taking into account the single parent relief amount of 4,008 euros per year. Tax law does not provide for a division between the parents, nor does it provide for both parents to be able to use tax class II. After the divorce, the other person has to make do with the less favourable tax class I.
According to the law, tax class II is awarded to the person to whose household the child belongs. In the alternating model, the child usually belongs to both households, as he or she lives with both the mother and the father. Therefore, the parents can arrange among themselves who receives the relief amount. If they do not make a decision in this regard, the parent to whom the child benefit is paid will receive the relief amount.
Child benefit is due to both, but is only paid to one
Since the family benefits office does not pay the child benefit to two recipients for organisational reasons, practically only one parent receives the entire child benefit transferred to his or her account. It basically goes to the person with whom the child lives. If the child lives alternately with both parents, the parents can determine which parent receives the child benefit. In the case of the alternating model, the family court can determine a claim for compensation on the part of the other parent. This parent is then obliged to give his or her share to the other parent. This is often offset between the parents against other child payments, such as the cash maintenance of the other parent. This is because in the real alternating model, both parents are entitled to child benefit on the basis of the equivalent care service.
Half the child tax allowance for everyone
The child allowance and the allowance for childcare, education and training are not paid out, but in the best case reduce the taxable income as a calculation parameter. The two allowances amount to a total of 2022,8 euros in 388 and are taken into account in half for both parents in the switching model. This means that 4,194 euros per parent are deducted from taxable income if the benefit of the allowances exceeds the child benefit. As part of the income tax return, each parent is examined individually to determine what is more favourable for him/her. The higher-earning parent is thus relieved of the tax burden to a greater extent.
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Child support is not deductible
In principle, child maintenance payments could be deducted from income tax as an extraordinary burden. However, the prerequisite is that the child is not entitled to child benefit or the child allowance. It does not matter who receives the child benefit. For minor children, maintenance payments are virtually excluded as extraordinary burdens, because there is always an entitlement to child benefit or the allowances. Therefore, neither parent can claim alimony payments for tax purposes.
Alternating model: Understanding childcare costs is an advantage
Two-thirds of childcare costs up to a maximum of 4,000 euros per child can be claimed for tax purposes as special expenses. It can be deducted by the parent who bore the expenses and to whose household the child belongs. As a result, each parent can deduct half, i.e. up to 2,000 euros. It is important for the recognition by the tax office that the payment has taken place as a transfer and can be proven. Cash payments will not be taken into account. If one parent has significantly higher expenses than the other and the other has not used their maximum amount, the parents can agree on a different percentage allocation and apply for it with the tax return. Tobias Gerauer, CEO of Lohi, advises that the contracts with the childcare facilities are signed by both parents, so that both names are noted on the invoice.
Tax legislation lags behind family models
Parents need to come to an agreement with each other on tax matters, no matter how divided they are. This is because only they can decide among themselves who receives child benefit and tax class II and how they divide the childcare costs among themselves. Unfortunately, the real switching model has so far only been taken into account to a limited extent by law in terms of taxation. The situation is different in social legislation, where the alternating model has already found its way. For example, the child is taken into account by each parent who receives housing benefit, or the payment of the additional needs for single parents is divided between both parents. (Press release Income Tax Assistance Bavaria)