Child benefits (Kindergeld) and child allowances (Kinderfreibetrag)

INDEX

• What can parents deduct from tax?

• Child benefits (Kindergeld)

• How much child benefits (Kindergeld) do I receive?

• For how long do you get child benefits?

• What are child allowances (Kinderfreibeträge)?

• What is the amount of the child allowance?

• Which is more beneficial: child benefits or child allowances?

• That’s how the Günstigerprüfung works

• Additional tax reliefs for families

What can parents deduct from tax?

Parents can reclaim many costs from the state via their tax return. The state grants parents tax benefits because it wants to support families and single parents. There are a number of support instruments for this.

Many parents do not know exactly which subsidies they are entitled to and how they can claim them. To take advantage of tax benefits, parents only need to submit a tax return and complete the Anlage Kind (child annex) for each child. It’s even easier with our online solution: We have highlighted all necessary entries for you so that you don’t forget any important information and make the most of the savings potential.

Child benefits (Kindergeld)

Child benefits (Kindergeld) must be applied for through the family benefits department (Familienkasse) by parents who are either residents of Germany and or are subject to unlimited tax liability in Germany. It is highly recommended that all parents apply for child benefits, as many benefits are dependent on entitlement to child benefit. The tax office (Finanzamt) can only take tax concessions into account if the Familienkasse accepts the application.

Of course, not only biological parents are entitled to state support. Foster parents and those with adopted children also receive support. The Familienkasse pays child benefits to one of the two parents. However, if there are two children, it is possible, for example, for the mother to receive child benefits for one of the two children and the father to receive the money for the other child.

How much child benefits (Kindergeld) do I receive?

Child benefits were increased for the years 2023 and 2024 to a uniform 250 euros per child per month. From 2025 onwards, a new type of support for children is planned to be introduced (Kindergrundsicherung) which already includes child benefits.

For how long do you get child benefits?

The entitlement is clear from the child’s birth until their 18th birthday. When the child reaches the age of majority, the entitlement to child benefits becomes more complicated. It is only granted to children who are

• attending school,
• training or studying,
• or applying to do so.

There is no more child benefit after the age of 25. The only exception is for children with a disability who cannot finance their own living expenses.

What are child allowances (Kinderfreibeträge)? {child-allowance}

Parents can claim child allowances (Kinderfreibeträge) by submitting their tax return. The purpose of the child allowance is to ensure the minimum subsistence level of children by exempting a certain amount of parental income from tax. This reduces the tax burden. The same conditions apply to the entitlement to child allowances as to child benefits (Kindergeld).

Child allowances consist of two components:

• the allowance for the child’s minimum subsistence level and
• the allowance for care, education and training needs (Freibetrag für den Betreuungs-, Erziehungs- und Ausbildungsbedarf, BEA for short)

A parent is also entitled to the full child allowances if

• they have adopted or taken the child into care alone
• the other parent is deceased or cannot be found or is resident abroad.

If parents opt for individual assessment, if they are divorced or unmarried or permanently separated, the child allowance is automatically split equally. If one parent does not meet their maintenance obligations, the other parent can apply for the full child allowance.

What is the amount of the child allowance?

Since January 1st, 2024, the total child allowance for both parents together is 9,312 euros. It consists of the child allowance (3,012 euros per parent) and the BEA (1,464 euros per parent).

Which is more beneficial: child benefits or child allowances?

Parents are either entitled to child benefits or to tax relief through the child allowance. It is not possible to use both. For most parents, child benefit is more worthwhile than the child allowance. When you submit your tax return, the tax office (Finanzamt) automatically carries out a Günstigerprüfung (favorable tax assessment) and calculates whether you benefit more from child benefits or from the child allowances and chooses the better option for you. The favorable tax treatment check is carried out individually for each child.

That’s how the Günstigerprüfung works

As part of your tax return, the tax office (Finanzamt) calculates your tax burden without the child allowance. It then deducts the child allowance from your income and recalculates the (now lower) tax burden. The difference is your tax advantage due to the child allowance. Your tax advantage is now compared with your entitlement to child benefits (Kindergeld). If you benefit more from child benefits, the tax office does not take the child allowance into account. Parents with high incomes usually benefit more from the child allowance than from child benefits.

Important: Regardless of whether you have applied for child benefits (Kindergeld) or not, for the Günstigerprüfung, (favorable tax assessment) the tax office always calculates with your entitlement to child benefits, not with the child benefits you actually receive. It is therefore highly recommended that you apply for child benefits - even if you can already see that the child allowance (Kinderfreibetrag) will be more worthwhile for you.

Child benefits

Parents should apply for child benefit. Entitlement starts from the birth of the child. However, child benefit can only be applied for retroactively for six months. There is a fixed monthly amount per child.

Child allowances

Child allowances mean that part of the parents' income remains tax-free. This is because the minimum subsistence level of every child must be guaranteed. The allowances are regularly increased, as are child benefits.

Additional tax reliefs for families

There are other tax incentives that are of interest to parents:

Relief amount for single parents

Single parents who are entitled to child benefits (Kindergeld) or child allowances (Kinderfreibetrag) are also entitled to an annual tax relief amount for single parents (Entlastungsbetrag für Alleinerziehende). The amount rose to 4,008 euros per year in 2020. An additional 240 euros is added for each additional child. As of 2023, the relief amount will increase to 4,260 euros per year. If you have tax class 2, this tax allowance is already taken into account in the monthly payroll deduction. Everybody else will claim it by submitting their tax return.

Childcare costs (Kinderbetreuungskosten)

Up to the child’s 14th birthday, ⅔ of childcare costs can be deducted from tax as special expenses (Sonderausgaben), up to a maximum of 4,000 euros per child per year. Childcare costs include, for example, the costs of crèches, day nurseries, kindergartens or childminders.

Child allowance (Kinderzulage) for Riester subsidy

Anyone who has taken out a Riester pension plan for private old-age provision receives an annual allowance of 300 euros per child born on or after January 1st, 2008. For children born before 2008, the allowance is lower: here the annual allowance is 185 euros. The child allowance (Kinderzulage) can be applied for for each child for whom there is an entitlement to child benefits (Kindergeld) for at least one month in the calendar year.

Child supplements (Kinderzuschlag)

Families with little income can apply for a supplement to their child benefits (Kindergeld). The amount is calculated individually and depends on income, number of children, and housing costs. The maximum amount has been 292 euros per child per month since January 1st, 2024. The child supplement (Kinderzuschlag) is always granted for 6 months and can then be reapplied for.

Child bonus (Kinderbonus)

To ease the burden on families during the Coronavirus pandemic, parents entitled to child benefits (Kindergeld) received a tax-free child bonus (Kinderbonus) for each child in 2020, 2021 and 2022. In 2020, the child bonus amounted to 300 euros per child. In 2021, there was an additional 150 euros on top of child benefit and in 2022 it was 100 euros.

School fees (Schulgeld)

If your child attends a private school for which a fee is charged, you can deduct 30% of the school fees from your tax bill as special expenses (Sonderausgaben). A maximum of 5,000 euros per child per year is deductible. If the school is a boarding school, the costs for accommodation, care and meals must be deducted from the school fees.

Education allowance (Ausbildungsfreibetrag)

If you are entitled to child benefits for your adult child who is in a course of study (Studium) or in vocational training (Berufsausbildung) and does not live at home with you, you can claim the education allowance. Up to and including 2022, it is 924 euros per year. As of 2023, the education allowance will increase to up to 1,200 euros per year. For each month in which the requirements for the education allowance are not met, the total amount is reduced by one twelfth.