How To Declare The Parental Allowance Correctly On Your Tax Return

Anyone who receives parental allowance will ask themselves, at the latest when preparing their annual tax return, how this benefit must be taken into account. The answer is quickly found, although there are some special features to consider.

Important Information On The Subject Of Parental Allowance And Taxes

The parental allowance itself is not taxed. However, this state benefit must be declared in the tax return. This means that the parental allowance is also taken into account for the calculation of the parents’ personal tax rate. Individual income, for example from self-employment or other earnings, is also added for this purpose.

Within a family and thus a joint tax-assessed couple, all types of income are added together to the parental allowance. There is a risk that a higher tax rate will be applied to the resulting sum. This can be the case, for example, if a mother stays with the child, who also had no salary before her parental leave, and finally applies for parental allowance for the period after the birth.

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What To Consider In The Tax Return Itself

Parental allowance must be indicated in the tax return on page 4 under the heading “Other information and applications” as income replacement benefits, which are subject to the progression proviso.

Information Goes Directly To The Tax Office

If taxpaying parents are now wondering how the tax office knows how much parental allowance is actually paid out, an answer can be found quickly. Because the family cash office reports this payment in its height directly and electronically to the tax office responsible for the parents. This means that the tax office already has the relevant data before the tax return is submitted. As soon as the parents then disclose their annual tax return, the amount stated there is compared with the amounts already received. In this context, it is important that the parents provide the correct information in any case. Duplicate entries, which can be found both in the jacket sheet and in Annex N, should also be avoided at all costs. After all, this results in a completely incorrect calculation at the end, which also results in an incorrect result. This leads to parents having to pay too much tax.

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Reacting Correctly When There Is A Certificate Of Parental Allowance That Has Not Been Transmitted

If parents receive a certificate, printed on paper, about a benefit payment that shows individual benefit amounts, they must add it to their tax return in any case. Even if, in principle, all payments from public authorities are transmitted electronically to the tax office, this may not be done, for example, for technical reasons. Even if the certificate comes from a foreign service provider, electronic transmission is often difficult. In order for the tax office to have all the necessary documents, they must be submitted by the parents.

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