As of: March 19, 2024, 8:02 a.m
By: Carina Blumenroth
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Anyone who has a child can claim parental allowance.
How high this is depends on your earnings in the previous year.
Also pay attention to tax back payments.
If you decide to start a family, your whole life changes.
Some impacts are financial.
For example, you can receive parental allowance.
If you choose parental allowance, you will receive more money over a shorter period of time.
If you choose parental allowance plus, the period is extended, but you will then have less money available per month.
However, it is important that you always put some money aside.
Parental allowance as a tax-free payment
If you receive parental allowance, you may have to pay additional taxes.
© Zoonar.com/Yuri Arcurs/Imago
As a state social benefit, parental allowance is tax-free, although parental allowance can increase your tax burden.
This is due to the so-called progression reservation.
This means that your taxable income has a higher tax rate, informs the
Finanztip.de
portal .
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Tax class influences the amount of parental allowance
The parental allowance is calculated based on the average income of the caring parent in the year before the birth.
So the higher your income, the more money you can receive.
However, there is a maximum value, which is 1,800 euros.
If parents earn different incomes, for example one parent earns much more than the other, it may be advisable to change tax brackets.
The combination of tax classes III and V is chosen, informs the
United Wage Tax Assistance.
The person who earns less then goes into the less favorable tax class V and therefore has higher deductions.
It follows that the parent who stays at home should switch to the more favorable tax class III.
However, United
Income Tax Assistance
points out that you need to act quickly.
The application must be submitted at least seven months before the month in which maternity leave begins.
Parental allowance influences the tax rate: how it is made up
The new tax rate is made up of various factors.
You take your taxable income and add it to your tax-free income (parental allowance).
The average tax rate is calculated based on total income.
The new tax rate is higher than before and is applied to the taxable income - i.e. the income without parental allowance -,
Finanztip.de
informs .
The
United Wage Tax Assistance
therefore recommends that families always put some money aside for additional tax payments.
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Tip for the tax return for parental allowance
If you receive parental allowance, the employee flat rate amount of 1,000 euros is usually deducted, informs the portal
Simply-Elterngeld.de
.
This weakens the progression effect and means that you can effectively save taxes.
If you want to calculate for yourself how parental allowance affects your taxes, you can try out the progression reservation calculator.