Kinderfreibetrag ulga na dziecko

Kinderfreibetrag – what you need to know

The Kinderfreibetrag, also known as the child tax credit, is one of the key elements of the tax system in Germany that aims to provide financial relief to parents. In this article, we take a closer look at what the Kinderfreibetrag is, what its key elements are, who can benefit from it and what changes to this relief the German government envisages for 2024.

What is the Kinderfreibetrag?

The Kinderfreibetrag is a tax credit that is available in Germany to parents or legal guardians of children. It is a form of support that aims to relieve the financial burden on families with children by reducing the tax base.

Kinderfreibetrag consists of two key elements:

  1. Freibetrag für das Existenzminimum des Kindes: the amount that is considered necessary to cover a child’s basic material needs. This amount is set each year by the German government.
  2. BEA-Freibetrag: additional relief for childcare and child education and training expenses.

Who can benefit from the Kinderfreibetrag?

The Kinderfreibetrag tax credit is available to parents or legal guardians of children under the age of 18. This relief is also available for children up to the age of 25, provided that certain criteria are met, such as continuing education or having no income of their own.

Kinderfreibetrag or Kindergeld?

In Germany, parents have a choice between two forms of financial support: Kinderfreibetrag and Kindergeld. Kindergeld is a family allowance that is paid monthly for each child. The Kinderfreibetrag, on the other hand, is a tax credit that reduces the parents’ tax base.

The decision to choose one of these forms of support depends on the individual family’s financial situation. Usually, if a parent pays little or no income tax, it is more advantageous for him or her to benefit from Kindergeld. The tax office automatically includes the Kindergeld in the tax return, even if the parent opts for the Kinderfreibetrag.

Kinderfreibetrag or Kindergeld – which is more beneficial?

The choice between “Kindergeld” and “Freibetrag” is automatically made by the German tax office (Finanzamt) as part of the annual tax return. The tax office calculates which option is more favourable for the taxpayer – whether receiving “Kindergeld” or taking advantage of the “Freibeträge für Kinder”. If the amounts of tax deductions exceed the benefit of “Kindergeld”, then deductions are applied, which may result in lower tax to be paid.

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A key factor influencing this decision is family income. Families with higher incomes are more likely to benefit from the tax advantages of the ‘Freibetrag’, as this deduction can save them more tax than the ‘Kindergeld’ they receive.

Child allowance w 2024 roku

According to the latest information, the Kinderfreibetrag tax credit is set to increase to almost €3,000 per child in 2024. This represents a significant increase compared to the current amount.

The Freibetrag für das Existenzminimum des Kindes is to amount to € 6024 and the BEA-Freibetrag to € 2,928. The total amount of the child tax credit is therefore to be € 7952.

Summary

The Kinderfreibetrag is an important part of the tax system in Germany that aims to provide financial support to parents. It allows parents to reduce their tax base and gain additional funds to cover the costs of raising children. In 2024, the Kinderfreibetrag is set to increase to almost €3,000 per child, which is good news for all parents working in Germany.

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