When a baby arrives at home there are many things to think about. You have to adapt everything for the newborn, buy the necessary things and hire, if necessary, extra services. One of them is childcare. It is possible that the deduction for maternity is better known at a general level, but there is also a deduction for childcare expenses. Do you want to know the requirements to be able to claim this deduction? We tell you about it!
Differences between the deduction for maternity and the deduction for childcare expenses
In this article we explained what deductible expenses were and what the rates were, so you may already have some idea of them. Just in case, let’s refresh your memory a bit: when you file your tax return, you have to pay a variable amount of money, depending on the profits you make during the year. Some of these expenses are deductible, i.e. you can claim them back on your taxable income.
When you have or adopt a child, the maternity deduction comes to mind. It can be claimed by mothers with children under the age of 3 or by fathers in the event of the mother’s death or if they have sole custody of the child. It is granted for each child under the age of 3 if the mother is working (either as an employee or self-employed) and is therefore registered with the social security system. The deduction can be up to €1,200/month if the requirements are met every month.
The deduction for childcare expenses works in a similar way, but with some conditions: only working mothers with dependent children under 3 years of age can access this deduction. In this respect the conditions are the same as for the maternity deduction. The difference to get this deduction is that the children must be enrolled in a nursery or some kind of education centre. The deduction in this case can be up to €1000 per year per child.
The deduction for childcare and the maternity deduction are not incompatible: both can be claimed and granted. Thus, to the €1,200 of the maternity deduction would be added approximately €1,000 of the childcare deduction. The following are considered to be childcare expenses:
- Registration and enrolment
- Attendance
- Meals
The payment is made on a monthly basis. Money paid by the mother’s, father’s or guardian’s employer or subsidies to pay for childcare facilities are not considered as expenses.
How the deduction for childcare expenses is applied
This type of deduction must appear in the differential quota section of the tax return. If it does not appear, you must modify your tax return and add these expenses in box 631. If you have received aid, you must subtract this money from the sum of the expenses. This type of financial aid may be aid from the company where the parents work for the nursery school or grants, if the parents’ situation means that they are eligible. This video from the Tax Agency illustrates very well how to tick the correct box for the deduction of the expense.
Do we have to prove the expense?
The mother in question does not have to take any steps to prove the expense. She does not have to submit any paperwork anywhere. It is the centre in question that is responsible for ‘notifying’ the tax authorities by sending the corresponding information. According to form 223, the day-care centre must present an informative declaration of the children and the expenses incurred that entitle the mother to financial aid. They must present all the information every year during the month of January with the information from the previous year. To fill in this document you need:
- The details of the parents.
- The months (whole months) that the child has spent in day care.
- The annual expenses that have been paid to the centre.
However, it is advisable to keep the receipts from the nursery or the centre the children attend. If there is a problem with the tax authorities, this way you will be able to prove the expenses.
What other family-related expenses are deductible?
Since we are talking about maternity and family, we wanted to explain what other expenses you can include in your tax return that are also deductible. Here is a list:
Deductions for maternity. As we have already explained above, they are compatible with the childcare allowance and to apply for them you must fulfil certain conditions: be self-employed or employed and have one or more children under the age of 3.
Deductions for dependent children. This allowance can be claimed if you have a child who is financially dependent on you. They must be under 25 years of age (unless the son or daughter has a disability of more than 33%), live with you or be financially dependent on you, have an income of no more than €8,000/year and not file a tax return with an income of more than €1,800.
Deductions for large or single-parent families. A large family is considered to be a large family when the couple has 3 or more children, whether or not they have the same children. You can deduct up to €1,200 per year. If it is a special large family (5 or more children), the amount can increase up to €2,400.
A few last details
In addition to all the conditions for claiming these deductions, it is very important to take into account the requirements of the autonomous communities. Each one has complete freedom to set any other type of tax deductions. Some of these types could be the personal situation of the family, if they make any kind of donation, if they make any research expenses, the habitual residence, etc.
We hope that we have resolved, if not all, some of those initial doubts that arise when you are nervous about the birth or arrival of a child. There are many things that a family or a single person has to manage when there is a new member, and the whole Blegal team is here to help you. You can contact us with any queries you may have, whether you need information or advice. The whole team will be happy to help you with any legal, tax or employment-related queries you may have.
For information on related topics, please visit our Fiscal and taxation page.
Photo by Sandy Millar on Unsplash
