Hi all
I had a baby in June and a couple of months ago I did the year end tax adjustment through my employer.
My company now has sent me the pdf with the YETA details and I can see for example how much money was deducted because of my housing loan, but for dependents of under 16 years old it just says I have 1 – but not how much money is deducted or how it will be deducted.
Anyone knows how much and how this will be deducted?
Thanks
by thisisorba
2 comments
You don’t get a tax deductible for children under 16.
You do get the monthly “childcare allowance” from your municipality though.
> for dependents of under 16 years old it just says I have 1 – but not how much money is deducted
As mentioned already, there is no tax deduction for children under 16. The deduction was abolished when child allowance payments were introduced. The idea is that child allowance payments are fairer than a tax deduction, because the value of a tax deduction increases as your income increases, whereas child allowance payments decrease as your income increases.
The reason that information about dependents under 16 is collected by employers and included on withholding summaries is that municipalities take the number of dependents under 16 into account when calculating the minimum amount of income that a person must earn in order to be exempt from residence tax. Each municipality has their own specific formula, but needless to say having dependents under 16 will result in a higher threshold for residence tax exemption. Unless your income is below the threshold, though, there are no tax benefits associated with claiming the dependent.