Ask a tax advisor on the topic of Income tax return

Child benefit as full tax amount against exempt amount

November 10, 2011 | 20,00 EUR | answered by Dipl.BW/SB Ulrich Stiller

I have received my income tax assessment for 2010, which I have uploaded accordingly.

What I do not understand is the explanation regarding child benefit or child allowance.

They calculate for me (I had already filed a written objection and a lady from the tax office called me back) that from the half child allowance of 3504 euros, a tax saving of more than the theoretically paid child benefit of euros arises (which I never received child benefit as I only pay alimony - I have begrudgingly understood that by now).

According to the tax office, my tax rate is approximately 21/22%, even if I had the top tax rate (which I don't), I would not reach 1104 euros in taxes with a 3504 euro allowance...

I do not understand why the tax office adds the 1104 euros as the full amount owed on my income tax. If the child benefit were to be credited against the taxable income, I would have understood, but this way...

Maybe someone can explain this to me so I can at least understand it - or tell me how I can explain a possible mistake to the tax office.

Dipl.BW/SB Ulrich Stiller

Dear inquirer,

Thank you for your inquiry, which I would like to answer based on your information and in the context of your situation in a preliminary consultation as follows:

You are entitled to the half child tax credit and childcare tax credit. Therefore, the tax office correctly deducted 3,504 euros from you. However, since you are entitled to child benefit, usually received by the biological mother if the child lives with her, half of the child benefit amounting to 1,104 euros will now be added to the income tax to be assessed, as you cannot claim both child benefit and tax advantage at the same time.

Without the child tax credit, your taxable income is 39,921 euros, which would result in an income tax according to the basic table for the year 2010 amounting to 9,906 euros,
with the child tax credit and child benefit offset 8,847 euros, so the tax advantage without Soli is 1,059 euros.

I hope I was able to assist you.

Best regards

Ulrich Stiller
Tax consultant/Diplom Business Administrator