How to obtain an additional allowance for the second child!
The tax relief for single parents had been increased to 1.908 Euro for years. Additionally, 240 Euro is added for the second and each additional child in the household (§ 24b EStG).
The closure of nurseries and schools during the coronavirus pandemic posed significant challenges for all families, particularly for single mothers and fathers. In 2020, the relief amount was increased from 1.908 Euro to 4.008 Euro, more than doubling it. The increase of 240 Euro remains unchanged (§ 24b para. 2 sentence 3 EStG, amended by the "Second Coronavirus Tax Assistance Act").
But what do you need to do?
The relief amount and the new increase are reduced by one twelfth for each full calendar month in which the conditions are not met. The relief amounts are applied for as part of the tax return in the "Form Kind". For employees, both amounts can already be taken into account during the year in the monthly wage tax deduction, leading to a lower deduction of income tax, solidarity surcharge, and church tax.
- The (basic) relief amount is taken into account by simply applying for tax class II at the tax office. The relief amount is included in the income tax table. However, only one child is considered. When applying, the tax office requires a declaration of your status, which you submit using the form Declaration for the application for tax class II (PDF).
- For the new increase of 240 Euro from the second child, you need to do a bit more: You must have a tax allowance entered in the electronic wage tax deduction features (ELStAM) at the tax office (§ 39a para. 1 no. 4a EStG). This allowance is distributed over the remaining months of the year from the month of application; it must be applied for by 30 November of the relevant tax year at the latest. The employer accesses the database, takes the monthly allowance into account, and withholds less income tax from the wages accordingly. The usual application limit of 600 Euro does not apply for the application for the allowance (§ 39a para. 2 sentence 4 EStG). For the application to consider the increase, use the form Simplified application for income tax reduction.
Since 2016, the applied-for income tax allowance is valid for a period of two calendar years (§ 39a para. 1 sentence 3 EStG). If your circumstances change to your disadvantage within the two years, you are obliged to have the allowance changed. This may be the case if you marry or move in with a partner. If you apply for an income tax allowance, you are obliged to submit an income tax return after the end of the tax year (§ 46 para. 2 no. 4 EStG). If the relief and increase were not taken into account in the wage tax deduction, both amounts can also be applied for with the income tax return.
The Federal Fiscal Court has recently ruled that jointly assessed spouses can also claim the tax relief for single parents in the year of marriage on a pro rata basis, provided they did not live in a household with another adult before the marriage (BFH ruling of 28.10.2021, III R 57/20).
The Federal Fiscal Court has also recently ruled that in the year of separation, the relief amount is to be granted on a pro rata basis for the months after the separation if individual assessment is chosen and no other adult lives in the household (BFH ruling of 28.10.2021, III R 17/20). Note: The ruling states: "Taxpayers who are individually assessed for income tax as spouses under §§ 26, 26a EStG can claim the tax relief for single parents on a pro rata basis in the year of separation...". From this, it can be concluded that the pro rata granting is only possible if individual assessment is chosen. However, looking at the BFH ruling III R 57/20 of the same day (see above), it can be inferred that the pro rata relief amount is also to be granted if joint assessment is chosen in the year of separation. It would have been desirable for the BFH to have expressed this more clearly.
(2022): How to obtain an additional allowance for the second child!
Do I receive the same amount of child benefit for all children?
If you have more than one child, you do not receive the same amount of child benefit for each child. The entitlement to child benefit is as follows:
Child benefit is paid for children up to the age of 18. The child's income is irrelevant.
The entitlement continues for children over 18 until their 25th birthday, as long as they are in education or doing voluntary service. Child benefit is paid by the family offices of the Federal Employment Agency. Public sector employees or pension recipients receive the money from their employers.
A child for whom you do not receive child benefit yourself can be counted as a so-called Zählkind to increase the child benefit entitlement for your other children. For example: A couple has three children together, and the husband also has a child from a previous relationship. The child lives with their biological mother, who also receives child benefit.
If the second wife now names her husband as the beneficiary, his first child can be counted as a Zählkind. The couple will not receive child benefit for this child, but the other children will be counted as the second, third, and fourth child. Over the year, the family receives 372 Euro more in child benefit.
Note: The Federal Fiscal Court has ruled on so-called Zählkinder in the context of non-marital partnerships as follows: If the parents of a joint child live together in a non-marital partnership and two older children from another relationship of one parent are also living in their household, the other parent does not receive the increased child benefit amount for a third child according to § 66 (1) EStG for the joint child (BFH ruling of 25.4.2018, III R 24/17).
(2022): Do I receive the same amount of child benefit for all children?
What is the tax relief for single parents?
If you are a single parent, you can apply for a tax relief amount in the "Form Child". Since 2015, the relief amount has been 4.008 Euro. An additional amount of 240 Euro is added for each additional child.
For each full calendar month in which the deduction conditions are not met, the relief amount is reduced by one twelfth. Condition: at least one minor or adult child for whom you receive child benefit or the tax-free child allowance must belong to your household. It does not have to be a biological child; the relief amount is also available for an adopted, foster, step, or grandchild. The child must be registered at your address. If the child is registered with several people, the parent who is entitled to child benefit receives the relief amount. The tax identification number must be provided for the child who belongs to the household.
Important: No other adult persons may belong to your household. Adult children for whom you receive child benefit are an exception. This also applies to children who are in vocational training, waiting for a training place, or doing voluntary service. The relief amount is also not at risk if you live with an adult in need of care.
Living with adults is harmless for the relief amount if there is no household community, but merely a shared flat with separate finances and separate management. A key feature of a household community is "joint management".
Current decision by the Federal Fiscal Court: jointly assessed spouses can also claim the relief amount for single parents in the year of marriage on a pro-rata basis, provided they did not live in a household community with another adult before the marriage (BFH ruling of 28.10.2021, III R 57/20).
Current decision by the Federal Fiscal Court: in the year of separation, the relief amount is to be granted on a pro-rata basis for the months after the separation if individual assessment is chosen and no other adult lives in the household (BFH ruling of 28.10.2021, III R 17/20).
Note: The ruling states: "Taxpayers who are individually assessed for income tax as spouses under §§ 26, 26a EStG can claim the relief amount for single parents on a pro-rata basis in the year of separation …". This suggests that pro-rata granting is only considered if individual assessment is chosen. However, looking at the BFH ruling III R 57/20 of the same day (see above), it can be concluded that the pro-rata relief amount can also be granted if joint assessment is chosen in the year of separation. It would have been desirable for the BFH to express this more clearly.
(2022): What is the tax relief for single parents?
What is the relief amount?
The relief amount has been increased to 4.008 Euro, more than doubling. For the second and each additional child, the relief amount increases by 240 Euro each (§ 24b para. 2 sentence 3 EStG).
The relief amount and the new increase amount are reduced by one twelfth for each full calendar month in which the conditions are not met. The condition for granting is that you are entitled to child benefit or the child allowance and BEA allowance for the child.
You are considered a single parent only if no other adult persons live in your household, except possibly adult children for whom you receive child benefit, e.g. children in education.
You can also claim the relief amount if the child only has a secondary residence at your home and, for example, is studying in another city.
The relief amount for single parents is granted retroactively for the past year if the relevant information is provided in the child annex.
Currently, the Federal Fiscal Court has ruled that jointly assessed spouses can claim the relief amount for single parents on a pro rata basis in the year of marriage, provided they did not live in a household with another adult person before the marriage (BFH ruling of 28.10.2021, III R 57/20).
Currently, the Federal Fiscal Court has also ruled that in the year of separation, the relief amount is to be granted on a pro rata basis for the months after the separation if individual assessment is chosen and no other adult person lives in the household (BFH ruling of 28.10.2021, III R 17/20). Note: The ruling states: "Taxpayers who are individually assessed for income tax as spouses under §§ 26, 26a EStG can claim the relief amount for single parents on a pro rata basis in the year of separation …".
It can be concluded that pro rata granting is only considered if individual assessment is chosen. However, looking at the BFH ruling III R 57/20 of the same day (see above), it can be inferred that the pro rata relief amount is also to be granted if joint assessment is chosen in the year of separation. It would have been desirable for the BFH to have expressed this more clearly.
(2022): What is the relief amount?
When will I receive child benefit and allowances for my child?
To receive child benefit, the child allowance or the allowance for childcare, education or training needs (BEA), the same conditions as for child benefit must be met. There are two different legal bases for entitlement to child benefit:
- Taxpayers are entitled to child benefit under the Income Tax Act (§ 31 f. and § 62 ff. EStG).
- Persons who are not or only partially subject to tax are entitled under the Federal Child Benefit Act.
Anyone who is German and has their residence or usual place of abode in Germany can apply for child benefit. The same applies to Germans living abroad who are either fully liable to income tax in Germany or are treated as such. Foreigners living in Germany can apply for child benefit if they have a permanent residence permit.
Important: Child benefit that has been approved is paid retroactively only for the last six months before the beginning of the month in which the application for child benefit was received. Therefore, even if child benefit is approved retroactively for a whole year, it is actually only paid for the last six months.
(2022): When will I receive child benefit and allowances for my child?
What are the conditions for the tax relief?
You are entitled to the relief amount if at least one minor or adult child lives in your household for whom you are entitled to child benefit or the child allowance. The tax office assumes that the child belongs to the household if they are registered at your address with either a primary or secondary residence.
If the child is registered with several people, the relief amount goes to the person receiving the child benefit.
The allowance is only considered once, even if you have several children. Exception: If you are separated from your partner, both parties can receive the relief amount if at least one child lives with the father or mother and the child benefit is paid to them.
Single means in the context of the relief amount that you do not meet the conditions for the application of the splitting tariff.
The conditions for the splitting tariff are not met if the parents were not married or if they were still married in the tax year but had been permanently separated since the previous year. Parents who did not live separately for even one day in the year are therefore not entitled to the relief amount (see below for current case law). You benefit from the relief amount for the first time in the year following the separation.
Furthermore, as a single parent, you must not live in a household with another adult, unless they are children for whom you receive child benefit. If you live with another adult, the tax office assumes that they share finances with you. This generally applies if you live with a partner, but also for parents, grandparents, or siblings.
In the case of shared accommodation without joint household management, the entitlement to the relief amount remains. However, you must prove that you manage finances separately. An exception is also possible if the other adult is almost penniless and cannot contribute to the household. This does not apply to partners.
Currently, the Federal Fiscal Court has ruled that jointly assessed spouses can also claim the relief amount for single parents on a pro-rata basis in the year of marriage, provided they did not live in a household with another adult before the marriage (BFH ruling of 28.10.2021, III R 57/20).
Currently, the Federal Fiscal Court has also ruled that in the year of separation, the relief amount is to be granted on a pro-rata basis for the months after the separation if individual assessment is chosen and no other adult lives in the household (BFH ruling of 28.10.2021, III R 17/20). Note: The ruling states: "Taxpayers who are individually assessed for income tax as spouses under §§ 26, 26a EStG can claim the relief amount for single parents on a pro-rata basis in the year of separation ...".
It can be concluded that the pro-rata granting is only considered if individual assessment is chosen. However, looking at the BFH ruling III R 57/20 of the same day (see above), it can be inferred that the pro-rata relief amount should also be granted if joint assessment is chosen in the year of separation. It would have been desirable for the BFH to express this more clearly.
(2022): What are the conditions for the tax relief?
