Increase in tax benefits (discounts) and bonus for children Finance.cz<

MEPs approved an increase in tax benefits for second, third and additional children. The amendment proposed by Jan Čižinský (elected for KDU-ČSL) was supported by representatives of all parties except the YES movement.

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Changes in tax benefits 2021

The increase in the tax benefit does not apply to the first child, but to the second, third and other children, who, according to the amendment, will increase the tax benefit by 15%.

For the second child, the tax benefit is to increase from CZK 19,404 to CZK 22,315 per year.

For the third and every other child, the benefit will then increase from CZK 24,204 to CZK 27,835 per year.

Annual tax benefits for children

* amount approved by the Chamber of Deputies

The Chamber of Deputies has approved a 15% increase in the tax benefit for second, third and other children since 2021, which, for example, the self-employed (self-employed) would feel when filing a tax return in 2022.

Employees whose benefits are deducted from their salary each month should experience an increase in the tax benefit from July 2021, and they could also look forward to a refund of the tax overpayment for January to June 2021.

The rules for applying the tax benefit do not change. Important for its application is the common household and maintenance of the offspring, which is:

The tax benefit can be applied for the month in which the child was born. Entitlement to the tax benefit most often ends at the end of the child's studies or at the age of 18.

Tax bonus - will its maximum increase?

The tax bonus, ie the amount which, due to the tax benefit, exceeds the calculated income tax, was previously capped at CZK 60,300 and the citizen could not claim more. This applied to multiple families.

However, with the adoption of the tax package from the Ministry of Finance, this ceiling has been increased since 2021, and Čižinský's amendment completely abolishes this tax bonus coverage.

If this amendment goes through the entire legislative process, the abolition of the ceiling will come into force as early as July 2021, which will help mainly families with more children or children with disabilities.

The abolition of the monthly limit will mean for employees that they will not have to wait until the annual settlement with the higher bonus, but will receive it in full when paying their salary.

How far is the amendment on increasing the tax advantage within the legislative process?

The amendment must still be approved by the senators and must be signed by the President of the Czech Republic.

Senators are not expected to have more significant reservations, there is only talk of a cosmetic adjustment, because the problem with this increase is that the annual tax benefit is not divisible by the number of months (twelve).

The Chamber of Tax Advisers has already called on the senators for this adjustment.

You can follow the approval of this amendment on our Facebook - Finance.cz, where we will inform you about the approval process.