The household is entitled to a fixed IRS deduction for each dependent child. Find out how it works and what the deduction amounts are.
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Any household is entitled to a Fixed IRS deduction for each dependent child🇧🇷 The amount of this deduction depends on the age of the child and whether there are more dependents in the same household.
Find out how this flat-rate IRS collection deduction works, what amounts are involved and how the division is made in the case of separated parents.
How much is the fixed deduction per child in the IRS?
The amount of the fixed deduction depends on the age of the dependent child (art. 78.º-A of the CIRS🇧🇷
- 600 euros if the dependent is more than three years old;
- 726 euros (600 euros plus a “bonus” of 126 euros) if you are three years old or younger by December 31 of the tax year.
However, this “bonus” can be higher if there are other dependents in the same household. In that case, the amount of the flat-rate deduction for each dependent aged up to six years is superior:
- 900 euros for the second and subsequent dependents (600 euros plus a “bonus” of 300 euros), regardless of the age of the first child.
For example, a couple with three children up to the age of six, deduct 2,526 euros from the IRS collection (726 euros for the first, 900 euros for the second and 900 euros for the third).
For a couple with two children, one teenager and the other a baby, the deduction for the eldest is 600 euros (because he is over three years old) and that for the youngest is 900 euros (since he is up to six years old and the bonus does not depend on the age of the former).
If, in addition to the teenager, this couple had not one, but two babies, they would be entitled to a fixed deduction of 600 euros for the eldest, 900 euros for one of the babies and 900 euros for the other, that is, 2,400 euros in total.
In households with only one child up to the age of three, the flat-rate deduction is 726 euros.
To be entitled to the bonus on the deduction, the child(ren) must not have exceeded the age of three before December 31 of the year to which the tax relates.
What happens when parents are separated?
When the couple separates and the children are in joint custody with alternate residence, established in an agreement regulating the exercise of parental responsibilities, the amount of the fixed IRS deduction for each dependent child is divided by the two parents in equal parts (either when the deduction is 600 euros, 726 or 900 euros).
This division is only possible if the children are in alternate residency status – this situation must be communicated by both parents through the Finance Portal, by February 15th of the year following the tax year.
If the children live with only one of the parents, or if there is no agreement regulating parental responsibilities, the fixed deduction reverts in full to the parent with whom the child resides.
What about other deductions?
In addition to fixed deductions, a set of variable expenses for dependents can be deducted from the IRS, such as expenses related to health, education and VAT deduction for invoice requirements.
Currently, parents with children in shared custody and alternate residence can choose the percentage they want to deduct from their children’s personal expenses, as long as the sum is 100%. For example, the father can deduct 60% of the child’s expenses and the mother 40%.
But, once again, this division into different parts will only happen if the parents inform the AT of their children’s residence status in time, as well as the percentage that each one will deduct.
And both have to agree on these percentages, because if the sum of the two is different from 100%, the AT will automatically apply the distribution at 50%, with each parent deducting half of these expenses.
If they do not communicate anything to Finance, the tax address of the minor on December 31 of the previous year will be considered and the variable deductions will be shared equally between the two.
Article originally published in July 2019. Last updated in December 2022.
