Child benefit and what parents can deduct from tax

Reading time: 3 minutes Under which conditions you receive child benefit and in what amount and how it is to be treated for tax purposes, they find out in this post.

Child benefit and what parents can deduct from tax

Child benefit

In Germany, as parents of children, you are jointly entitled to child benefit. Child benefit can be applied for after the birth of a child by presenting a birth certificate. The family funds of the different federal states are responsible for this. These manage and organize the distribution of child benefit in the Federal Republic. A prerequisite for the application is that the family lives in Germany. Under certain conditions, child benefit can also be obtained abroad. In the event of a divorce, the child benefit is divided equally between the parents. This applies if one parent pays child support towards the other. Half of the child benefit can then be deducted.

Amount of child benefit

Since January 1, 2018, the first and second child have been paid 194 euros each. There is 200 euros for the third child and 225 euros for the fourth child. Child benefit is to be increased again in summer 2019.

Child benefit for the tax return

For families, there is a form for the “child attachment” for the tax return. This form must be completed separately for each child. So if you have three children, you will need the "Attachment child" three times when submitting the tax return. The respective tax identification number is entered on this form for each child. This will be issued after the child has registered after the birth and sent to you by post from the Federal Central Tax Office. This number has to be stated again each year in the parent’s tax return. In the form "Attachment child" is entered how high the entitlement was in the respective year. Eligible does not automatically mean that child benefit has also been paid to the beneficiary. If both parents live in the same household and the mother receives child benefit, the father is also entitled to benefit. Even if he didn’t really get the money. Eligibility results from the children’s registration address. The family fund assumes that the children have their main residence there and pays the child benefit accordingly to those who are also registered there adults out. Child benefit cannot be paid proportionately. If the children are brought up together in two different households, the parents share the child benefit equally. This means that the parent who receives the benefit pays half of it to the other.

Child benefit and benefits under the 2nd Social Code (SGB II)

Child benefit is intended as a kind of pre-tax relief for families in Germany. This is especially the case for families with a higher total income. With lower incomes, the child benefit is a financial support for the family. As parents You the full amount always paid in addition to their income. It does not matter whether it is a salary from an employee relationship or a self-employed activity. For families or single parents who receive Hartz IV, child benefit is offset against this state benefit. Just as is the case with parental allowance.

Child tax credit

The child allowance is an additional tax relief for families. When you file your tax return, you must state the amount of the child allowance to be offset on the form. The amount of the child allowance is adjusted regularly and is currently 2,394 euros per parent.

The entitlement to the allowance exists from the child’s month of birth and is then deducted from the year accordingly. In the case of parents living separately, the child allowance is normally still fully credited to the respective parent. The child allowance can be transferred in whole or in part to the other person in certain situations. An individual analysis is required to determine whether this is meaningful and possible for the respective family.

The child allowance is also always taken into account when calculating the solidarity surcharge and collecting church tax. The basic right to child benefit has been sufficient for tax purposes since 2004. Since 2007, any comparable entitlements from abroad can also be asserted. The child allowance can be deducted in total from taxable income. This applies to both employees and the self-employed.

Tax allowance for childcare, education and training needs

The BEA tax-free allowance has existed in this form since 2002. This additional tax-free allowance is justified by the fact that it takes more time and effort for the care of smaller children. No separate proof is normally required for this. Until 2001, this allowance was still called the care allowance. The renaming is the continuation of this.

What else is deductible

In addition to the tax-free allowance, you can deduct special expenses such as school fees for attending a private school. Childcare costs can also be claimed. For both, separate sections for the precise information are provided on the last page of the three-page form "Attachment child". The total amount of school fees paid is entered here. Then you are asked how much the respective parent has taken over. This is stated in percent. Here, too, it is possible to mutually transfer the deductible amount to a parent who has actually made the main part or all of the payment. The same applies to childcare costs.

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