The first statement of this article is as follows: Whether the child benefit or child allowance can be claimed for a taxable person is checked and determined by the tax office as part of the income tax return.
Source: Rainer Sturm / pixelio.de
So you have little opportunity to influence this decision. By entering the number of child allowances on the income tax card, a possible disadvantage, at least for solos and church tax, is prevented in advance when deducting income tax.
The second statement of this article is this: The child allowance is better! &# 128521; (At least if you think a higher income is better than a lower income.)
For everyone who is still interested in why this is so and whether child benefit and child allowance can also be at the same time, this article on child allowance will shed a little more light on the dark.
In Germany, child benefit is usually paid for almost every child (I will not explain the child in this article). In tax law, however, it is not a question of whether the child benefit was actually paid, but only whether and to what extent you are entitled to it. You don’t need to know more here.
The single and double child allowance
The child allowance is actually a child allowance. Only there is no flat-rate payment here. The child allowance is not paid by anyone as an increased child benefit. It only reduces the tax burden. The child allowance is to be deducted from the income similar to the lump sum for advertising costs for employees and is currently 2,184 euros. In addition, there is also the allowance for childcare, education and training needs in the amount of 1,320 euros. All in all, the sum of the two allowances is understood as the child allowance. For better understanding, I only use the term child allowance, which is 3,504 euros. The double allowance is accordingly 7,008 euros. What is this important for? If you are married and assessed together, you and your spouse will receive double the child allowance. If you are not married, you only get a single allowance for one child. An exception for parents living separately is when only one parent "cares" for the child. Original is said when only one taxpayer accepted the child. One can say that a child allowance of 7,008 euros is available for each child, which is distributed to both parents or only one of the two. If the child was not born in January, the child benefit or child allowance is only available pro rata for each “started” month.
The number of child allowances as a tax deduction feature
Most people will only know the child allowances as a number from the income tax card. Then there was 0.5 or 1.5 or something similar. This number of child allowances does the following. The income tax is usually calculated on the annual income. Now the number of child allowances is simply deducted fictitiously for the calculation of the solos and the church tax (not for the income tax – this is only done with the income tax return). The fictitiously calculated, lower wage tax is used as the basis for the church tax and the solos, which are accordingly lower. A little hint – the church tax and the solos are calculated from income tax, not from income. In tax classes 1 and 2 there is 0.5 times the child allowance per child (0.5 is shown on the income tax card or at ElStAM) and in tax classes 3 and 4 there is 1.0 times the child tax allowance. Who gets confused in the tax classes – in this article I have explained all of them again. Tax classes 5 and 6 have no child allowance.
With the income tax return, the tax office checks how high the tax burden is, once with and once without a child allowance. It compares the difference with the child benefit to which you are entitled. The higher the individual tax rate, the higher the likelihood that the child allowance will be cheaper than the child benefit. The difference is then paid to the taxpayer as part of the income tax refund. An example?
There is a child allowance of 7,008 euros with a marginal tax rate of 42.5% (this is the tax rate on the last earned euro). This means that a tax difference of EUR 2,978.40 can be determined as the first value. The child benefit for the first child is usually € 2,208 in year. The tax reduction is therefore cheaper than child benefit – the difference is paid to the taxpayer as an income tax refund.
One can also say that from a marginal tax rate of 31.5% the child allowance is worthwhile. This wording is even more precise: from an average tax rate of 31.5% on the last 7,008 euros earned, the child allowance is cheaper than child benefit.
In some cases consists the possibility that no Entitlement to child benefit exists in tax law but a child is recognized. In these cases, the child allowance can be registered as a tax allowance with ElStAM.
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