Wealthy parents should get child benefit

IZW tip database -

Since 1996, parents no longer receive child benefit plus child allowance, but either one or the other: low and normal earners receive child benefit, higher earners receive the tax allowance. Technically it works like this: Everyone - including the millionaire - receives child benefit upon application. When preparing the income tax assessment, the tax office checks ex officio whether the tax savings of the child allowance are not higher than the child benefit.

Higher earners then have to give up child benefit again: The tax office credits the tax savings from the child allowance and offsets this against the child benefit. That is why many “rich” parents do not apply for child benefit at all: "Why bother if I have to give it back at the end?" Many think to themselves and are satisfied with the child allowance.

But since 2004 a new legal situation applies: In your 2004 tax assessment, you have to repay the child benefit in any case, even if you did not receive it at all. (Legal basis: § 31 EStG)

Conclusion: Therefore, you should definitely apply for child benefit. The deadline does not threaten to expire for the time being: An application for child benefit 2004 is possible until December 31, 2008. The previous six-month application period no longer applies since 1998. In any case, you can and should apply for child benefit retrospectively as of 01.01.04 so that no money is withdrawn from you that you did not receive. (Legal basis: Section 66 (3) EStG)


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