How can I have the child allowance entered in the ELStAM?

The child allowance is granted retrospectively, but you can have it entered in your electronic wage tax deduction features (ELStAM). Although you will not pay less income tax in advance, the mid-year burden may still decrease. This is because the child allowance is taken into account when calculating church tax and the solidarity surcharge, which are then reduced. You must have the allowance entered at your tax office. You should bring the following documents:

• Identity card or passport
• Wage tax certificate
• Birth certificate
• If applicable, paternity recognition certificate if you are not married
• If applicable, certificate of life for children registered at a different address

The certificate of life must not be older than three years. If you cannot provide the certificate of life, e.g. because the child lives abroad, you must contact your tax office. The tax officer will enter the child allowance there.

Parents of children over 18 must also contact the tax office to have allowances entered.

How can I have the child allowance entered in the ELStAM?

Child tax allowances pay off

Children, like their parents, are entitled to annual allowances for income tax. These allowances can legally reduce the tax burden. Particularly with capital gains, a strategic distribution within the family can bring tax advantages. Despite still moderate interest rates, it is worth exploring this option.

Capital Gains and Tax Allowances 2025

To fully utilise the saver’s allowance of 1.000 Euro at an interest rate of 2.5%, approximately 40.000 Euro would need to be invested. Parents should check whether capital gains can be transferred to the children to benefit from their tax allowances. Children can use the following tax allowances in 2024, provided they only have income from capital assets:

• Basic allowance 12.096 Euro
• Saver’s allowance 1.000 Euro
• Special expenses allowance 36 Euro
• Total tax-free (per child) 13.132 Euro

This means: Capital gains such as interest, dividends, or profits from the sale of securities remain tax-free up to an amount of 13.132 Euro.

Gifts of Capital Assets to Children

Parents can transfer capital assets to their children up to an amount of 400.000 Euro per child without incurring gift tax. However, the transfer of assets must comply with civil law regulations and not be solely for tax avoidance. To ensure this, the following points must be observed:

• The capital must be paid into the child's account or deposit.
• Parents must no longer have unrestricted access to the capital or its income.
• The gift must be credible and documented.

Additional Aspects for High Capital Income

Children with high capital gains may need to make their own contributions to statutory health insurance. Additionally, such income can affect benefits such as BAföG, as certain income and asset limits must be observed. Therefore, it is advisable to have larger asset transfers checked for tax and legal implications.

Child tax allowances pay off

Do I receive the same amount of child benefit for all children?

In the past, if you had multiple children, you did not receive the same amount of child benefit for each child. However, since 2023, the rate has been standardised. The entitlement to child benefit is:

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 benefits offices of the Federal Employment Agency. Public sector employees or recipients of pension payments receive the money from their employers.

Do I receive the same amount of child benefit for all children?

Do I only have a child benefit entitlement for my biological children?

No. Child benefit entitlement exists for the applicant's biological children and also for their adopted children. You can apply for child benefit for foster children if they live in your family and there is a permanent relationship of supervision, care, and upbringing. Furthermore, the custody and care relationship with the biological parents must no longer exist. Occasional visits from the biological parents are harmless. If you have taken siblings into your household, you are entitled to child benefit if they can be equated with foster children.

Child benefit is also paid if a stepchild or grandchild lives in your household. In these cases, however, there is no child relationship in the sense of tax law. Therefore, step- or grandparents are not automatically entitled to a child allowance, but only when the biological parents transfer the child allowances to the new guardians in Form K. If orphans or children who do not know where their parents are have no other person entitled to receive it, the children themselves can receive the child benefit. They then receive the amount that would be due to them for their own first child.

If you as parents have given a child up for adoption, the child relationship between you and the child ends at that time. Your entitlement to child benefit and tax allowances also ends at the same time.

For a child you have taken into your household with the intention of adopting, you can receive child benefit even before the adoption, as there is usually a foster relationship.

Do I only have a child benefit entitlement for my biological children?

How do I reduce my church tax by claiming child benefit?

The amount of church tax depends on your place of residence. In Bavaria and Baden-Württemberg, church members pay 8 percent of the assessed income tax, while in other federal states it is 9 percent.

Please note: Church tax is also taken into account at the same rate for capital gains tax. For employees with child allowances in the electronic wage tax deduction features (ELStAM), church tax is calculated based on a so-called notional wage tax.

Church tax without child allowance: You live in Berlin and have a gross monthly salary of 3.000 Euro in tax class IV. Your monthly church tax is 28,51 Euro.

Church tax with two child allowances: You live in Berlin and have a gross monthly salary of 3.000 Euro in tax class IV. Your monthly church tax is now 9,74 Euro.

Important: Child allowances do not reduce the monthly income tax, but only reduce the monthly church tax and solidarity surcharge. This also applies if you receive child benefit at the same time.

Child allowances in the income tax return

In the income tax assessment, child allowances only reduce the taxable income if the tax advantage is greater than the child benefit received. However, for the calculation of church tax and the solidarity surcharge, the allowances are taken into account "notionally".

Advantage in case of mid-year change

Even if children are only to be considered for part of the year (e.g. in the case of birth or end of education), the full child allowance is always deducted for church tax and the solidarity surcharge.

How do I reduce my church tax by claiming child benefit?

How are child benefit and the child allowance related?

The same conditions apply for the allowances as for the entitlement to child benefit: there must be a parental relationship, the child must belong to your household and be under 18 or meet the conditions for the extended entitlement to child benefit.

The annual child allowance for parents who are jointly assessed for tax purposes is 6.024 Euro, and the BEA allowance (for care, education and training) is 2.928 Euro. Thus, parents are entitled to a total allowance of 8.952 Euro per child for the tax year 2025. For separately assessed or single parents, each parent is entitled to half of the allowance.

As part of the income tax assessment, the tax office automatically checks whether the tax relief through child allowances is more favourable than the child benefit. The decisive factor is the entitlement to child benefit, not the actual payments received. This comparison is called the favourability test (§ 31 EStG). You do not need to calculate anything yourself.

Problem: Child benefit applied for too late

In many cases, parents miss out if they have not applied for child benefit in time. Because:

• Child benefit not paid out is counted as an entitlement in the favourability test.
• A retroactive payment is legally limited to six months (§ 66 Abs. 3 EStG).
• This means that both the child benefit and the tax allowances are forfeited – even though there was an entitlement.

Change in law brings improvement

A change to § 31 EStG as part of the Act Against Illegal Employment and Benefit Fraud now takes into account whether the child benefit was actually paid out. If it was applied for too late and not paid out, the mere entitlement no longer counts – this allows parents to benefit from the child allowances despite late application.

How are child benefit and the child allowance related?

How far back can I claim child benefit?

To receive child benefit, an application is mandatory. Child benefit must always be applied for in writing at the relevant family benefits office.

Note: Since 1 January 2018, a special limitation rule with a payout restriction applies to child benefit. The payout period has been significantly shortened: child benefit is now paid retroactively for only the last six months before the beginning of the month in which the application for child benefit was received, instead of the last four years.

For the calculation of allowances, it is irrelevant whether you have actually received child benefit or not. When the tax office compares the amount of child benefit and child allowance as part of the favourable assessment, it does not record the child benefit you actually received, but only your entitlement (see the note on the new regulation below).

During the income tax assessment, the tax office checks whether the tax saving from the child allowance and the BEA allowance is higher than the child benefit. If this is the case, the allowances are taken into account. The child benefit is then added to the calculation of the income tax to be assessed.

If the allowances are lower than the child benefit, the child benefit remains. Child benefit is therefore a kind of advance payment on the possible tax advantage. As part of the favourable assessment, the entitlement to child benefit is taken as the basis, even if no child benefit was actually paid out. In this way, the tax assessment does not have to be changed if the parents submit an application for child benefit retrospectively.

Currently, as parents, you must always first apply for child benefit, even if you speculate that the allowances will be more favourable for you. In any case, the child benefit is added to the income tax.

Attention: In practice, there are numerous cases in which child-related benefits are not granted because there is an "entitlement to child benefit" to be credited, but this has not actually been paid. And above all: Since the retroactive payment of child benefit has also been legally limited to six months, child benefit can often no longer be realised retrospectively. In other words, parents who forgot to apply for child benefit in time, even though they were entitled to it, are more or less left empty-handed under the current legal situation, as the "entitlement to child benefit" is credited. This means that the children's subsistence level is taxed. However, there is currently light at the end of the tunnel: Very hidden in the "Act against Illegal Employment and Social Benefit Fraud" is a legal change that affects child-related benefits in income tax. Due to an amendment to Section 31 of the Income Tax Act, it is now no longer the child benefit to which you are entitled that counts, but the child benefit paid out if the child benefit was applied for too late and therefore not paid out. Those affected can then at least benefit from the allowances in the tax assessment.

Tax tip for old cases: Until mid-2019, Section 66 (3) of the Income Tax Act stated: "Child benefit is paid retroactively only for the last six months before the beginning of the month in which the application for child benefit was received." There were plenty of cases where child benefit was, for example, retroactively granted in January 2018 for the whole of 2017, but only paid out for six months. In any case, the tax authorities and the family benefits offices interpreted the regulation in this way.

But that's not how it works! The Federal Fiscal Court has reprimanded the tax authorities and especially the family benefits offices: If child benefit is granted, it must also be paid out. The family benefits offices should have only granted child benefit for six months. (BFH ruling of 19 February 2020, III R 66/18).

• The case: The claimant is the father of a daughter born in February 1997. In an application already submitted in 2015, the claimant stated that his daughter intended to start training as an educator in September 2015. The family benefits office initially granted child benefit, but revoked the child benefit approval in July 2015 due to the lack of proof of training. With an application received by the family benefits office in April 2018, the claimant again requested child benefit, this time even for the period from August 2015. In a notice dated April 2018, the family benefits office granted ongoing child benefit from August 2015. However, it limited the back payment of child benefit to the period from October 2017 to April 2018 (= six months). The tax court upheld the claim against this and recognised a back payment claim for the months August 2015 to September 2017.
• The BFH agreed with the lower court. As the family benefits office had retroactively granted child benefit beyond the six-month period in the case in dispute, the BFH also considered it obliged to pay the child benefit to the claimant to this extent.

How far back can I claim child benefit?

Which benefits comparable to child benefit must I declare?

In general, all parents are entitled to child benefit, but there are exceptions if other financial benefits are received. You must declare these on the relevant form.

Exceptions to child benefit entitlement

• If you receive child allowances from statutory accident insurance or pension insurance, you are not entitled to child benefit.
• If comparable benefits are paid abroad or by an intergovernmental or supranational institution, the entitlement to child benefit lapses.

Partial child benefit

If the child supplement or child allowance for the pension is lower than the child benefit, the difference is paid as partial child benefit. This also applies to comparable benefits from another EU country, the European Economic Area or Switzerland.

Standardised child benefit and abolition of "counting children"

On 01.01.2023, the staggered child benefit rates were abolished. Previously, the amount of child benefit depended on the number of children – from the third child onwards, the child benefit was higher. In 2025, a standard amount of 255 Euro per month will apply for each child.

This also eliminates the role of "counting children". Counting children are children who do not receive child benefit directly but were taken into account when calculating the amount. This regulation was particularly relevant for patchwork families or children from previous relationships.

Further notes:

• Claims for child benefit must also be declared if you did not receive child benefit in the relevant year, for example, if the child was born in December and the child benefit is paid in the following year.
• If child benefit is used in the maintenance calculation, separated parents must each declare half of the child benefit as a claim.

Which benefits comparable to child benefit must I declare?

Do I still need to declare child benefit if my child lives with my ex-partner?

If child benefit is claimed for a child, the parent who looks after the child receives the child benefit. However, if you are separated from your partner and are obliged to pay maintenance for the child, half of the child benefit is added to the maintenance calculation. This way, you indirectly benefit from half of the child benefit.

Therefore, you must declare half of the child benefit to which you are entitled in your tax return. Of the 255 Euro monthly child benefit to which you would be entitled in the year 2025, you enter 127.50 Euro per month. If you were separated for the entire year and the parent looking after the child received the child benefit for the entire period, you enter 1,530 Euro (12 times 127.50 Euro) for 2025 for the first child.

It is irrelevant whether you pay the full maintenance according to the „Düsseldorfer Tabelle“ or a reduced rate.

Even if you, as the parent obliged to pay maintenance, have officially waived the crediting of half the child benefit, your entitlement to half the child benefit is included in the favourable assessment, in which the tax office calculates whether the child benefit or the allowances are more advantageous for you.

Do I still need to declare child benefit if my child lives with my ex-partner?

What is the child allowance?

Child benefit and child allowance provide tax relief for parents to help offset the financial burdens of having a child. The entitlement to child benefit exists automatically from birth, but must be applied for in writing – usually at the family benefits office.

Important: The entitlement to child benefit or the child allowance is not for the child, but for the parents or guardians.

Child Benefit

Child benefit is paid monthly and is tax-free. The amount depends on the number of children. It is usually transferred by the family benefits office to the parents' account.

Child Allowance

The child allowance is not paid out but deducted from taxable income during income tax assessment. It thus reduces the tax burden.

Child benefit is considered an advance payment on the child allowance. The tax office automatically checks during the tax assessment which is more favourable for the parents – child benefit or allowance (→ favourable assessment).

Child allowances in 2025:

• 6.672 Euro for jointly assessed parents
• 3.336 Euro per parent for individual assessment
• 2.928 Euro BEA allowance (for care, education and training)

Duration of Entitlement

There is an entitlement to child benefit or child allowance:

• until the child's 18th birthday
• until the age of 25 if the child is in education, training or voluntary service
• Indefinitely if the child is disabled and cannot support themselves

What is the child allowance?

How much child benefit can I receive?

Child benefit was previously staggered according to the number of children, but is now a uniform 255 Euro per child.

Child benefit is paid for children under 18 in any case. For children over 18, the entitlement continues until their 25th birthday, as long as they are in education or doing voluntary service. Child benefit is paid out by the family offices of the Federal Employment Agency. Public sector employees or recipients of pension payments usually receive the money directly from their employers.

How much child benefit can I receive?

Minimum standard of living: Are the child allowances unconstitutionally low?

The minimum subsistence level for children must be exempt from tax for constitutional reasons. This is done through the child allowance and the BEA allowance (for care, education and training needs). The tax office automatically checks whether these allowances or the child benefit paid during the year are more favourable.

The Lower Saxony Fiscal Court expressed serious doubts about the constitutionality of the child allowance for 2014, which led to a suspension of execution. The Federal Fiscal Court partially agreed (Lower Saxony FG of 16.2.2016, 7 V 237/15).

However, the Federal Constitutional Court declared the judicial submission by the Lower Saxony FG to be inadmissible (BVerfG, decision of 5.9.2024 - 2 BvL 3/17; published on 2.10.2024).

Minimum standard of living: Are the child allowances unconstitutionally low?