Tax Reliefs for Families in Germany

What kinds of tax reliefs are there in Germany for families?

Parental allowance ("Elterngeld") is financial support from the state for parents who reduce their work hours after having a child. The amount you receive depends on your income, and you can increase it by changing your tax bracket ("Steuerklasse"). If you're married, consider choosing tax bracket III for the spouse going on maternity leave. Remember to apply to change tax brackets at least seven months before maternity protection begins. Although parental allowance is tax-exempt, include it when calculating your tax rate.

Child allowance ("Kindergeld") is at least €219 per child and requires an application to the Family Benefits Office ("Familienkasse"). The Employment Agency has leaflets with more information on child benefits.

Childcare costs can be deducted by claiming two-thirds of the expenses from your taxable income as special expenses. You might also qualify for tax exemptions for your child's maintenance and vocational training expenses as exceptional financial burdens. If your adult child doesn't live with you, check the designated allowance for covering their specific needs during vocational training.

Single parents receiving child benefits or child allowable deduction can claim the allowance for single parents ("Entlastungsbetrag für Alleinerziehende").

Spouses or civil partners can file a joint tax return using "Ehegattensplitting." This is advantageous when there's a significant income difference. Indicate "Zusammenveranlagung" (joint return) on page 1 of the tax form.

If you care for dependents, you can claim a lump-sum care allowance for tax purposes. This allows a fixed amount to be deducted from your taxable income as care costs.