Taxes and allowances: At the last possible date, the Federal Council decided on higher child benefit and income tax relief so that these can come into force in time for the turn of the year. After the traffic lights went out, they were on the rocks. The aim of the changes is to offset the burden on citizens from the increased prices. Otherwise, the state would have become the inflation winner – and the taxpayers would have been the inflation losers. To prevent this, the basic income tax allowance will rise to 12,096 euros next year (and to 12,348 euros the following year). It is currently 11,784 euros. Anyone who earns less pays no income tax. After the basic allowance, the tax authorities initially demand 14 cents from every additional euro earned. But the burden increases quite quickly with income. Because inflation devalues all income in real terms, the other tariff benchmarks will be shifted beyond the basic allowance: at the beginning of 2025 by 2.6 percent (twelve months later by another two percent). The exemption limit for the solidarity surcharge will also be adjusted. The only exception to the tariff shift is the value from which the so-called rich tax applies (277,826 euros). The child allowance will increase by 60 euros to 6,672 euros per year at the turn of the year (and to 6,828 euros at the beginning of 2026). It is currently 6612 euros. In addition, there is the allowance for the care, upbringing and training of children of 2,928 euros. Child benefit will be increased by five euros to 255 euros per month (in 2026 by another 4 euros to 259 euros). In addition, it is legally stipulated that in the future any change in the child allowance will automatically lead to a corresponding adjustment in child benefit. To this end, it is stipulated: “The child benefit is to be commercially rounded to the nearest full euro.” In addition, the immediate child allowance in the Social Security Code and the Asylum Seekers Benefits Act is currently being increased by five euros.
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