How does the tax deductibility of childcare costs work?
November 19, 2022 | 50,00 EUR | answered by Lilli Reuter
Dear lawyer,
My name is Erwin Klinger and I am a father of two school-aged children. Over the past few years, I have incurred high costs for childcare as both my wife and I are working professionals. Now I am wondering how I can deduct these childcare expenses from my taxes.
Currently, I pay a significant amount each month for the care of my children in kindergarten and after-school care. These costs put a strain on our family budget and we would like to know if there is a way to at least partially deduct them from our taxes.
My wife and I both work full-time and cannot do without childcare for our children. Therefore, it would be very helpful for us to know if there are specific requirements for deducting childcare expenses from our taxes. What is the maximum deductible amount and what documentation do we need to provide for this?
We are aware that there may be different regulations and special cases that may affect the tax deductibility of childcare expenses. Therefore, it would be very helpful if you could provide us with a detailed explanation of how we should proceed in our specific case in order to benefit from this tax relief.
Thank you in advance for your support and advice.
Sincerely,
Erwin Klinger
Dear Mr. Klinger,
Thank you for your inquiry regarding the tax deductibility of childcare costs. I am pleased that you are interested in this topic and I will be happy to assist you.
In general, you can deduct a portion of childcare costs from your taxes to reduce your financial burden. It is important to note that the deductibility of childcare costs in Germany is regulated by law. You can claim the costs for the care of your children in kindergarten, after-school care, daycare, with childminders, or in other childcare facilities.
However, the deductible amount is limited. You can deduct up to 4,000 euros per year for each child. So for two children, that would be a total of 8,000 euros. These costs can be declared in your tax return as special expenses. It is important to mention that the costs are only deductible if both parents are employed or in training.
To be able to claim childcare costs on your taxes, you must provide the relevant invoices and payment receipts. It is advisable to keep all receipts carefully, as the tax office may request to see these documents during a tax audit.
In your specific case, where you and your wife are both employed and have high childcare costs, you should gather all relevant receipts and declare them in your tax return. Also, note that the costs for care in kindergarten and after-school care are deductible.
I hope this information has been helpful to you. If you have any further questions or would like more detailed advice, I am at your disposal.
Best regards,
Lilli Reuter
Tax Law Attorney
