Childcare: more deductions in 2025

You will be able to claim more childcare expenses against tax from 2025

You can claim childcare costs against tax. Under the current rules, you can deduct two thirds of childcare expenses, up to a maximum of €4,000 per child, as special expenses. Expenses for services to care for a child belonging to your household who has not yet reached the age of 14 or is unable to support themselves due to a physical, mental or psychological disability that occurred before the age of 25 are eligible. Expenses for lessons, the teaching of special skills and for sporting and other leisure activities are not deductible. In particular, costs for daycare or a childminder are deductible.

As a family policy measure from 2025 the limitation of two thirds of the expenses to 80 % of the expenses and the maximum amount of childcare costs deductible as special expenses to 4,800 per child will be increased.

PepperPapers hint for you:

In this respect, it should be noted that childcare costs can only be taken into account as tax-reducing special expenses by the person who has borne them. This also applies to single parents in the parity alternating model (where the child is taken into both households in approximately equal measure), as the Federal Fiscal Court has now ruled in its judgment of July 10, 2024 (case number III R 1/22).

In practice, in such cases, both parents must pay the childcare costs proportionately and both parents must jointly allocate child benefit and the relief amount for single parents according to their wishes. In addition, the Federal Fiscal Court ruled in this judgment that the sole allocation of the relief amount for single parents to only one parent is also legal in the case of the parity alternation model.

If the beneficiaries do not make a mutual agreement regarding the relief amount, the relief amount is due to the person to whom the child benefit is paid. The relief amount for the same child is always granted to only one beneficiary for the same month, even if several beneficiaries meet the conditions for granting it; there is no provision for splitting.