• 17/09/2022
• By wizewebsite
• 340 Views

Children and taxes 2022: who is entitled to tax relief and how has the tax relief increased?<

With the adoption of the tax packages in 2021, it changed the setting of the tax benefit and the tax bonus for children. Families with children not only have more money from the state for tax benefits, but from now on, self-employed persons who apply tax rates can also draw on these benefits for children.

What is the tax benefit for children in 2022?

The tax benefit for the second, third and other children was increased in 2021, which also affected the cases of holders of ZTP/P cards.

If you have a disabled child with ZTP/P, the benefit is twice as high. The law does not specifically say that you have to apply the benefit according to the age of the child or according to age order, i.e. the oldest child is the first child. You can enter the children in order in the form in order to achieve the greatest possible advantage, if you have a child with ZTP/P it is worthwhile to enter him last in the order.

In addition to the tax benefit for the child, the tax discount for the taxpayer also increased in 2021 and 2022.

FO income tax return for tax year 2021

Source: Shutterstock

When can self-employed persons use the tax credit for children in 2022

Since the last amendments, a self-employed person can claim the tax credit for children in the same way as an employee, regardless of whether he claims flat-rate or actual expenses. The limit of minimum taxable expenses, i.e. six times the minimum wage, must only be observed. The limit was CZK 91,200 for 2021 (tax return filed in 2021), for 2022 (tax return filed in 2023) the limit will be CZK 97,200.

Who gets a tax credit?

A tax credit is money you get from the government if your tax credit is higher than your calculated income tax. This is how you get extra money when you use the child tax credit. The state pays a tax bonus if the income is at least six times the minimum wage. Both employees and entrepreneurs are entitled to a tax bonus. The self-employed receive a tax bonus once a year after submitting their tax return, while employees receive it every month in their net salary.

The conditions under which the state will pay you a tax bonus have changed for 2021. Due to the increase in the minimum wage, the threshold for paying the tax bonus increases to CZK 91,200 per year, which represents CZK 7,600 per month. This limit does not include capital and rental income.

Abolition of capping the amount of the tax bonus

The amount of the tax bonus was capped by law at CZK 60,300. However, part of the tax changes for 2021 included the abolition of this ceiling.

The amendment also corrects a minor omission of the previous amendment on state aid, which canceled the annual tax bonus limit, but the monthly limit of CZK 5,025 was retained in the law.

The amendment on state support also cancels this monthly limit for applying the monthly tax bonus of CZK 5,025.

For the first time, the cancellation of the monthly tax bonus limit will be reflected in the calculation of the tax advance for the month of January 2022 for the tax period of 2022.

Paternity leave and kindergarten fees

Paternity leave (or paternal postnatal care) is not a tax change, but it still deserves to be mentioned. It is still a relatively new social benefit, which new fathers are entitled to and thanks to which they can enjoy a full 10 working days of paternity leave after the birth of a child, which they can spend with their wife and child.

Given that the minimum wage has increased again to CZK 16,200 in 2022, the tax discount for a child placed in preschool, the so-called kindergarten fee, will also increase to the same amount. For the year 2021 (for the tax return submitted in 2022 and the annual tax settlement 2022) you will apply the school fees in the amount of CZK 15,200, for the next year the amount of the school fees will rise to CZK 16,200.