Child allowance 2019: what it is and how high it is
Children cost money – most parents know that too well. That is why in Germany there is an opportunity for people with children to save taxes with the child allowance when filing tax returns. You can find out what the child allowance is, where you can enter the child allowance and how it relates to child benefit here.
What is the child allowance??
The child allowance is one allowance for parents who reduce taxable income. The tax-free allowance means that your gross salary after tax deduction leaves a higher net amount. The tax-free allowance for the child also affects the calculation of the solidarity surcharge and church tax.
The child allowance consists of two parts: the Exemption for the subsistence minimum of the child and the Exemption for childcare, education or training needs (BEA), the first being adjusted again and again due to fluctuating living costs. The second allowance, however, usually remains constant. In 2018, the allowance for the BEA was EUR 1,320 a year, the allowance for the subsistence minimum, however, was EUR 2,394 a year – the total child allowance in 2018 was EUR 3,714 per child. This amount is to be applied per parent. If you include both parents, you will get a child allowance per child in 2018 7,428 euros in the year.
In 2019, this allowance for the subsistence minimum will be increased to 2,490 euros – the total child allowance will increase to a total of 7,620 euros on.
You cannot count both for your child, i.e. the child benefit and the full child allowance – the tax office offsets the child benefit that has already been paid out against the tax benefit from the tax allowance. Most people benefit from child benefit rather than child allowance.
How much is the child allowance??
The amount of the exemption depends on the individual tax bracket dependent. In tax classes 1, 2 and 3 you can deduct a child allowance of EUR 7,620 per child and year. If you fall under tax class 4, the parents can count 3,810 euros per spouse for each child – so together you will get back the amount of 7,620 euros per year. There are no child allowances in tax classes 5 and 6.
As a rule, the tax-free allowance pays off as soon as a single parent becomes more than around 32,000 euros gross in a year or a couple has a combined income of about 64,000 euros recorded. When filing the tax return, the tax office will check whether the tax-free allowance or child benefit offers you a financial advantage.
Tax class 1
7,428 euros per child and per year
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