Childcare costs can be deducted from the “child appendix”.
Each person with a child under the age of 14 or a child with a disability can therefore deduct up to 4,000 euros per year (but a maximum of two-thirds of the costs) for childcare. Stiftung Warentest recommends stating all care costs in the tax return in order to get as much money back from the state as possible. The entire 4,000 euros will be given to those who declare expenses of at least 6,000 euros. This is possible in “Annex child” on page three of the tax return. If the child is 14 or older, 20 percent of the care costs can be deducted as so-called household-related services. This category also includes, for example, the costs of keeping pets, some of which can also be deducted from taxes.
But beware: When deducting childcare costs, it is absolutely necessary to submit invoices, receipts and/or other documents. In addition, payment may only be made by bank transfer – expenses incurred elsewhere will not be taken into account by the tax office. This was decided by the Federal Fiscal Court (BFH) in 2013 (Az. III R 64/13).
Only deduct services that are primarily used for care
Paragraph 10 No. 5 EstG goes on to say: “This does not apply to expenses for tuition, the teaching of special skills or for sporting and other leisure activities”. Only services that primarily serve to care for the child can be deducted, but not education or leisure activities. This means that, for example, the membership fee for a sports club or private tuition cannot be deducted in “Anlage Kind”, although the child is actually being cared for by other people here. The costs for a bilingual kindergarten, on the other hand, can definitely be deducted – because here the focus is on the care, the language acquisition happens on the side. According to this regulation, costs for the day-care center, after-school care, crèche, accommodation in a boarding school, childminders, au pairs and holiday care can also be deducted.
Care provided by family members can also be deducted
Childcare by family members can also be deducted from tax, provided they do not live in the same household as the child or are one of the parents. It is important, however, that there must be an employment contract: the grandparents, for example, could be employed as mini-jobbers on a 450-euro basis, the monthly salary then falls under the deductible childcare costs. Tax consultant Tanja Maria Hirsch explains to Stiftung Warentest: “It’s really complicated, [diese Regeln] to be observed, since it is usually about occasional and not constant care as with childminders. In such cases, the tax office examines them very carefully and initiates checks to ensure that care allowances are actually taxed by the recipients.
For this reason, Stiftung Warentest recommends consulting a tax advisor and having him explain the legal situation in detail before hiring the related carer. This will avoid trouble with the tax office. If a person looks after the child free of charge, the costs incurred can still be deducted – this includes, for example, travel costs.
Subsidies from the employer must be offset against the childcare costs
There is one exception to the deductibility of training costs: If the child attends a predominantly privately financed school or a school abroad and can thus acquire a qualification recognized in Germany, 30 percent of the costs incurred can be deducted from tax as special expenses. This is not possible in the “child attachment”, but may still be relevant for some parents.
And in the area of care costs, the general rule is: The reason for the care that is tax deductible is a private matter and does not have to be stated to the tax office. It is irrelevant whether the parents could not look after the child themselves at the time of care because they were at work or on vacation.
Subsidies that parents receive from employers for childcare are always tax-free – which is why current law means that childcare costs must be reduced by bonuses of this kind and correspondingly less money is reimbursed by the state.
Attention: Which parent deducts the expenses?
The amount of up to 4,000 euros applies to both parents together. Stiftung Warentest explains that it will be divided equally between parents who are married to each other, whereby an individual application to change the split shares can be submitted to the tax office. There is a different rule for parents in all other life situations: expenses can only be deducted in whose name the corresponding invoice was issued. In addition, the rule applies that only the parent who has custody and in whose household the child lives can deduct the expenses. Tax consultant Tatjana Albert Steuer writes on her website: “Household means responsibility for the material and immaterial well-being of the child”. Accordingly, according to a judgment of the BFH from 1997 (file number XR 11/97), it can also be the case that a child of separated parents belongs to both households.
Olga Rogler / Editor finanzen.net
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