Parents can get a lot of costs reimbursed by the government when they do their taxes. There is a simple reason why the tax office guarantees tax advantages. The government wants to support families with children and children with single-parents, because it is in the best interest of our society for people to have children and raise them - and they are taken care of accordingly. There are many support tools that become accessible when you do your taxes.
Note: Many parents don’t even really know for sure which financial means they have a right to and how they can get a refund. In order to use tax advantages, parents only have to submit a tax declaration and the respective information about your child(ren). We have clearly highlighted all the information necessary for our users in our online tool “arbeitnehmersteuereklaerung.de”, in order for them to utilise maximum savings potential and to not forget important information.
Did you buy a laptop or a mobile phone?
Did you move last year for work?
Did you work less than 12 months last year?
Was your work commute more than 30 minutes?
Are you married with tax class III/V?
Did you pursue a further education?
Did you receive self-employment income?
You are required to file a tax return.
Filing your tax return is worth it! You will most likely get a very high tax refund.
You can expect a high tax refund.
CHILD ALLOWANCE (Kindergeld) AND CHILD TAX EXEMPTIONS (Kinderfreibetrag)
In comparison to child tax exemptions (Kinderfreibetrag), the child allowance (Kindergeld) is only paid to parents who apply for it. The tax office would like information about your finances as well as your general family situation when you apply for the child allowance. We highly recommend that all parents apply for the child allowance (Kindergeld), because many of the benefits that you receive are dependent on your right to this child allowance (Kindergeldanspruch). When the application is approved, the tax office can then, for example, guarantee tax benefits. You can apply for the child allowance at the Family Benefits Office (Familienkasse).
Naturally, not just biological parents have a right to government aid. Foster parents and those that have adopted or those that are the legal guardian of a child have a right to this support as well.
CHILD ALLOWANCE (Kindergeld)
This year, the child allowance (Kindergeld) is € 204 for each of the first two children, € 210 for the third child and € 235 for each additional child. You have to apply for the child allowance. Parents who reside in Germany or those with two households, but their main “home” is in Germany.
The situation is clear for children from birth to their 18th birth year. If the child is older than 18 years old, the child allowance becomes a bit more complicated. The child allowance is only granted if the child is going to university or learning a vocation. The child allowance is no longer granted after a person is 25 years old, even if they are still studying or they haven’t found a job yet. Children with mental or physical disabilities that can’t take care of themselves are the exception to this.
CHILD TAX EXEMPTIONS (Kinderfreibetrag)
In addition to the child allowance (Kindergeld), parents can get an exemption (Kinderfreibetrag) for their children when they do their taxes. The purpose of the child tax exemption is to ensure that all children have the minimum they need for their existence. This assurance is guaranteed. If the parents don’t exceed a specific amount, their earnings remain tax-free.
The entire child tax exemption (Kinderfreibetrag) is made up of two components; the minimum existence exemption (Freibetrag für das Existenzminimum des Kindes) and the care upbringing and education exemption (Freibetrag für den Betreuungs- und Erziehungs- oder Ausbildungsbedarf (BEA). In 2017, the total child tax exemption amount (Gesamtkinderfreibetrag) is € 7,356. One is also entitled to it if one parent has died or is not subject to taxation. The same applies if the father can’t be found. In order to be able to get the child tax allowance, you must provide information about each child individually when you fill out your tax declaration.
This generally applies: Parents are entitled to either the child allowance (Kindergeld) or to the child tax exemption (Kinderfreibetrag). It isn’t possible to receive the child allowance and then try to deduct the complete amount of the child tax exemption from your taxes.
The child tax exemption is really only an advantage for about 5% of all taxpayers. Most parents find the child allowance is more advantageous.
ADDITIONAL EXEMPTIONS (Entlastungsbeträge)
There is a whole range of other tax deductible amount that could be interesting for parents:
- Entlastungsbetrag: For single parents that are entitled to the child allowance or the child tax exemption. This amounts to about € 2,000 that can be deducted.
- Kinderbetreuungskosten: About ⅔ of your childcare expenses can be deducted from your taxes as a “miscellaneous expense” until the child reaches their 14th birthday. The maximum amount for this is € 4,000 per child and per year.
- Riester-Förderung Kinderzulage: Those who have a Riester Plan for a private pension can get a supplementary allowance of €300 for each child.
- Kinderzuschlag: A supplementary allowance to the child allowance that those who earn very low can apply for at the Family Benefits office. This social allowance in addition to your child allowance has a limited amount of €170 per child.