Child Allowance: Who Qualifies and What You Get
Learn how this tax-free allowance works for parents in Germany and how the government decides if it is better than monthly child benefits.
Child Allowance is a tax-free amount applied to your income to reduce the amount of tax you owe based on how many children you have.
Who it's for
This benefit is intended for parents. You qualify if you have children under the age of 18. However, if your child is currently in education, the eligibility period is extended, and you may qualify until they reach the age of 25.
What you get
You receive a tax-free allowance for each child you have every year. This amount is used to reduce your taxable income, which can lower your overall tax burden.
What it costs you
There is no direct fee to apply for this. When you file your taxes, the Finanzamt automatically performs a comparison check to determine the most efficient way to support you. They look at your specific financial details to see if this tax allowance provides you with more savings than the standard monthly child benefits.
The catch to know
The most important thing to understand is that you cannot receive both the tax allowance and monthly child benefits at the same time for the same child. The tax office performs a comparison to see which option saves you more money, and they will apply the one that is more beneficial to your specific situation.
How to apply
- Gather your necessary tax documentation for the year.
- Complete your tax declaration.
- Submit your declaration to the Finanzamt.
- Wait for the tax office to complete their automatic comparison between the allowance and child benefits.