Children cost money.
In order to support families financially, the state offers a range of subsidies - from child benefit to tax breaks.
Munich - The state supports families by granting them tax advantages.
"You should know this and use it for yourself in good time, so that the financial burden is lower," advises the Bavarian income tax aid and has published ten tips on how parents can save money.
Tax tips for young parents: 1. Put child on the income tax card
In order to put the child on the income tax card, parents do not have to take action themselves: "The registry office automatically transmits the birth of a child to the Federal Central Tax Office," explain the experts.
“The child income tax characteristic is thus stored in the central database, which the employer calls up on a monthly basis.” In this way, the child is taken into account when paying wages or salaries.
"That means a little less taxes in relation to church tax and, if necessary, the solos."
Tax tips for young parents: 2. Parental allowance for the first few months
Parental allowance is available for beneficiaries after the birth of the child: "If at least one parent takes less work due to the birth and thus suffers a loss of income, the parental allowance to be applied for covers part of it." The personal amount is therefore the net income before the birth and the Depending on the care constellation, the latter also influences the duration of the subscription. “The minimum rate is 300 euros and is capped at a maximum of 1,800 euros per month.” With ElterngeldPlus, the halved amounts flow, but twice as long. The maximum subscription period is 28 months. "Parental allowance is tax-free, but is subject to the progression proviso and must be stated in the income tax return." Also important to know: filing a tax return is mandatory when receiving parental allowance,as the wage tax assistance experts further explain.
Tax tips for young parents: 3. Apply for child benefit in good time
After the birth, parents should not forget to apply for child benefit.
"For the first and second child there is 219 euros, for the third 225 euros and for the fourth 250 euros and tax-free," says the Bavarian income tax aid.
Once applied for, the money flows automatically up to the age of 18.
The application must be submitted to the local family benefits office with the child's birth certificate and tax identification number.
The child benefit is paid out retrospectively for a maximum of six months.
"If you apply too late, you will lose the first few months."
Tax tips for young parents: 4th Corona bonus for the year 2021
Extra money in the Corona year: "This year, in addition to child benefit, a child bonus of 150 euros will be paid out," the experts write.
The idea behind it: The money should cover the additional expenses caused by the pandemic.
“Anyone who has applied for child benefit and has received it regularly for at least one month in 2021 will automatically receive the special payment.” It was transferred in May, but it can also be paid out later.
Tax tips for young parents: 5. Child allowances are taken into account
According to the information provided by the income tax assistance, the tax office will check whether there is another tax break in addition to child benefit.
“The basis for this is the submission of an income tax return with an 'attachment child' for each child.” As part of a cheaper check, the tax officials compare whether the tax relief through the exemptions is higher than the annual child benefit including child bonus.
“If this is the case, there will be an income tax refund or an additional payment will be reduced.” The tax exemptions therefore add up to a total of 8388 euros per child per year for both parents.
Single parents and separated parents are credited with half the amount.
Tax tips for young parents: 6. Relief for single parents
If you are a single parent, you should state this in your tax return. Because: "Those who raise their child alone in their four walls are entitled to an additional tax bonus," emphasize the experts. The prerequisite is that no other adult person lives in the household. “For the first child entitled to child benefit, a relief amount of EUR 4008 will be taken into account in 2021. For each additional amount it increases by 240 euros. ”In concrete terms, this means: This amount is deducted from the total income. However, you don't necessarily have to wait for the tax assessment until there is money: In tax class II, the amount is stated in the monthly income tax deduction, so that it is immediately noticeable. "Otherwise it can be applied for retrospectively as part of the income tax return."
Tax tips for young parents: 7. Deduct childcare costs
The annual storage of bills, account statements and contracts can pay off according to income tax assistance: "Up to the age of 14, parents can claim two thirds of the costs incurred for childcare for tax purposes." , Day nursery, kindergarten, day-care center or homework or holiday care.
"The tax bonus is capped at 4000 euros per year and child."
Tax tips for young parents: 8. Employer subsidies
Some companies pay their employees extra money for day care centers, child minders or kindergartens: "As long as the child has not yet started school, the employer can provide his employees with a monthly allowance for childcare that is tax and social security-free." The grant must be paid in addition to normal wages and used specifically for childcare outside of one's own household.
Tax tips for young parents: 9. Health and long-term care insurance
If the child has to pay health or long-term care insurance contributions, these can also be deducted as special expenses for the parents, emphasize the tax experts.
“As long as the child is entitled to child benefit.” It does not matter whether the child or the parents are the policyholders.
Tax tips for young parents: 10. Child allowance at Riester
“If there is a Riester contract for private old-age provision, the state subsidy for children increases.” In addition: “In addition to the basic allowance of 175 euros, a further 300 euros per year are added for each child as a child allowance.” As a result, the amount to be paid is reduced Own contribution in the same amount.
In order to receive the child allowance, an entitlement to child benefit is again necessary.
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