As of: January 31, 2024, 6:23 a.m
By: Natascha Heidenreich
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Press
Split
After child benefit, the child allowance should also increase.
The problem is, it could only benefit certain families.
Munich – He is concerned with justice, emphasizes Federal Finance Minister Christian Lindner (FDP).
Finally, in January 2023, the federal government increased child benefit from 219 euros per child to 250 euros.
It is only fair that the child allowance now follows, says Lindner.
However, the enthusiasm of the other parties in the traffic light coalition is limited.
“Unfair”: This is how SPD leader Lars Klingbeil summarizes the Federal Finance Minister’s proposal, as
Wirtschaftswoche
reports.
Klingbeil emphasizes that only the children of rich parents would benefit from the advantages of a higher child tax allowance.
So the question is: From when does child benefit become worthwhile until the child's 25th birthday and who is the child allowance suitable for?
Parents cannot decide whether child benefit or child allowance
In any case, it is not necessary for the parents to decide between child benefit or child allowance.
When submitting your tax return, the tax office automatically calculates which option is financially more suitable in each individual case.
Parents don't have to calculate for themselves what is more worthwhile for them.
Child tax allowance: Do only rich families benefit?
© Vira Simon/IMAGO
But one thing should always be kept in mind: parents should always apply for child benefit.
The child allowance, on the other hand, does not require an explicit application.
When filling out the tax return, you should definitely fill out the child attachment.
Christian Lindner's plans: The child allowance should be further increased subsequently
In contrast to child benefit, there is a child allowance so that the subsistence level for children can remain tax-free.
However, the other parties criticize that the advantages of the tax allowance are only apparent to families with high incomes.
Instead of the child allowance, families with an annual income of less than 60,000 euros receive child benefit.
Since January 1, 2023, child benefit has been 250 euros per child per month.
However, child benefit will no longer be available for a long time.
The advantages of the tax cut are particularly noticeable to those who earn well
As of January 1, 2024, the child allowance was increased from 6,024 euros to 6,384 euros.
The Ministry of Finance wants to go further and retroactively increase the amount to 6,612 euros.
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A calculation example: Save hundreds of euros in taxes thanks to the child allowance
A calculation example reveals exactly what this tax advantage could look like.
WirtschaftsWoche
gives an example of a family that has a taxable annual income of
120,000
euros
.
Without the child allowance, this family would have to pay around 29,360 euros in taxes
annually
.
From these 120,000 euros, the child allowance of 6,612 euros required by Christian Lindner and around 2,928 euros (as an additional allowance for care, upbringing or training needs) can now be deducted.
This leaves a taxable amount of
110,460 euros
.
Instead of 29,360 euros, the family in the calculation example still has to pay around
25,670 euros in taxes
annually .
The
Vereinigte Lohnsteuerhilfe eV
gives the example of a family with two full-time working spouses who have a child.
Your annual income amounts to
80,000 euros
, which you have to pay tax on.
Without the child allowance, this family would have to pay 15,656 euros in taxes
annually
.
With the allowances, a total of 8,952 euros are deducted from the 80,000 euros of the example family.
The taxable income therefore shrinks to
71,048 euros.
There are still around
12,760 euros left in taxes
that have to be paid.
The tax office looks at the difference between the taxes with and without the allowances and in this case would determine that it is 2896 euros.
If the family received child benefit, they would receive 3,000 euros per year.
In this case, the tax office would not take into account the child allowance, but rather the child benefit.
However, the family must have applied for this in advance.
Families who have an above-average income save hundreds of euros in taxes thanks to the tax exemption.
It is estimated that families with a taxable income of over 80,000 euros benefit from the tax exemption.
(
nhf
)