Tax returns for families

Many parents look to deduct child related expenses from their taxes.

On this page, we’ll show you what you can claim for, how to do it, and how to save time and stress when filing your tax return.

The way to a better tax outcome with children are things like the tax-free allowance and child benefit. If you were doing a manual tax return, these details would usually be entered into Annex K.

Marriage offers many tax advantages, like the possibility of a joint tax assessment and spousal splitting.

Find out how to make use of these advantages in our guide on tax advantages through marriage.

Child benefit and child allowance are two different forms of support that the state offers to families. The child benefit is support received in the form of payments, while the child allowance reduces your income tax. Families can claim either one of these, but not both.

The child allowance is based on the subsistence level of the child. As a rule, it is only worthwhile claiming the child allowance if your income exceeds a certain level. In our article on child allowance and child benefit, we provide the current figures.

It’s important to note that child benefit is also available for adopted and foster children. In both cases, your children must live in your household.

The child benefit amounts are adjusted annually, and you can find them in the child benefit article.

ELSTER is the official software of the tax office. Forms are filled out online and submitted via My Elster. This also works for families, but the software is by no means popular everywhere.

Complicated tax terminology and a large number of fields that leave people confused and frustrated, and not wanting to carry on.

In many cases, the child benefit entitlement extends beyond minors, to people who are in training or studies, for example.

In cases like these, the entitlement is valid until the child reaches the age of 25. If studies or training are not completed at that point, the entitlement can be extended even further.

Child benefit also continues to be paid if there is an interruption of a maximum of four months between different phases of education, e.g. between leaving school and starting education or studies.

Furthermore, there is continued payment of the child benefit if the child is unable to care for himself or herself due to a disability.

Parental allowance is designed to support new parents by compensating the loss of salary after child birth.

However, regardless of whether you are employed, self-employed, unemployed, studying, or in training, all young parents are entitled to this benefit.

Parental allowance is paid for a maximum of 14 months, and can also be split between you and your partner. In the case of a split, the period of entitlement is reduced to 12 months. The allowance amount depends on your previous income.

You can find all relevant information on parental allowance and how to apply for it in this article.

A confirmed child benefit claim is also relevant for other items: If your child living with you is under 14, you can deduct the childcare costs from your taxes.

This includes expenses for things like:

• Day care
• Childminder
• Domestic helper who also looks after your child while you are at work.
• Disability (age limit does not apply)

Two thirds of your childcare costs per year can be deducted as special expenses. However, there is a limit to take into account. You can find this in the article on special expenses ("Sonderausgaben").

Health and long-term care insurance contributions paid by you are considered special expenses, as is part of public school fees.

If your child is already of age and their maintenance and vocational training is paid for by you, education allowance can be claimed, if you are entitled to child benefit. In the article on the current tax-free allowances, you will find the maximum amount that can be claimed.

If you are not entitled to child benefit, you can still declare these expenses as extraordinary expenses. The amount is then based on the annual basic allowance.

If you have taken out a contract for state-subsidised old-age provision (Riester pension), your offspring will contribute to your old-age security from the moment they are born. You will receive an annual allowance of hundreds of euros per child; for children born after 2008, the allowance is even higher.

In the article on the Riester pension, you can find out what proportion of your gross salary must be paid in order to receive the full subsidy, and exactly how high the allowance is.