Wednesday, December 8, 2021

What is Child Tax credit and how to receive it?

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In practice, the child discount is a tax-free allowance for parents and single parents. If you are entitled to child benefit and your income is not too high, you are entitled to this child tax credit. The child discount can be found in the child budget. If you have 1 or more children, you are most likely entitled to this child-related budget. If you are a single parent, the so-called single parent head will be added as a supplement.

Conditions child discount 2020

Parents look for a supplement for their children under different names. Children are expensive, so a tax discount or surcharge is often very welcome. And the child for whom you are applying for the child discount does not have to be your own child, but must be a child you are caring for and who is registered at your address.

All conditions for the child discount at a glance:

  • A child is registered at your home address.
  • You provide for the cost of living for this child.
  • It is your own child, a stepchild, a foster child or an adopted child.
  • You will not receive a foster parent allowance for the foster child.
  • You have nationality or a valid residence permit.
  • If you have a partner, he or she also has nationality or a valid residence permit.
  • You will receive child benefit for the child.
  • Maintaining to a significant extent means that your contribution to the cost of living for the child
  • As a rule, those who receive the child benefit for the child also receive the child tax credit.
  • The child is younger than 18.

How to apply for the 2020 child discount?

The child discount you are looking for is referred to by the tax authorities as the child-related budget. The child budget is an advance, comparable to the health care allowance. You will receive the child budget if you meet the conditions. The amount you receive depends on your income. Because you do not know this income exactly at the beginning of a year, the tax authorities work with advances. You will be paid a certain amount each month and after a year it will be determined by means of a final decision whether you may have received too much child budget as a child discount or whether you are still entitled to an extra amount. If you want to apply for the child discount, you must therefore apply for the child budget. Once you are in the system of the Tax Authorities and you already receive it.

Tax Free Payout

Just as the child benefit is tax-free, so is the child budget annex child discount. The child tax credit is not added to your income, but is paid out net. The big advantage is that your income will not increase from a tax point of view as a result of the child tax credit, so that you may also be eligible for other allowances. The payment of the child discount does not affect the other allowance to which you may be entitled.

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