Austria offers substantial tax benefits for families with children, recognizing the financial responsibilities of raising a family. Understanding these benefits can significantly reduce your tax burden and increase your disposable income.
Family Bonus Plus (Familienbonus Plus)
The Family Bonus Plus is Austria's primary tax credit for families and can provide substantial tax savings.
Key Features
- Amount: Up to €2,000 per child per year
- Age limit: Children under 18 years old
- Extended eligibility: Children under 24 if in education or vocational training
- Type: Tax credit (reduces tax liability directly)
How It Works
Unlike deductions that reduce taxable income, the Family Bonus Plus directly reduces your tax liability euro for euro:
- Example: If you owe €3,000 in taxes and have one child, your tax liability reduces to €1,000
- Refundable: If the credit exceeds your tax liability, you may receive a refund
- Both parents: Can be split between parents or claimed entirely by one parent
Eligibility Requirements
- Residence: Child must live in your household for more than 6 months per year
- Financial support: You must provide more than half of the child's financial support
- Family allowance: You must be receiving family allowance (Familienbeihilfe) for the child
Childcare Cost Deduction (Kinderbetreuungskosten)
Parents can deduct childcare expenses, providing additional tax relief for working families.
Deductible Amount
- Maximum: €2,300 per child under 10 years old
- Full deduction: Actual costs up to the maximum limit
- No minimum: Any amount of eligible childcare costs can be deducted
Eligible Expenses
Formal Childcare
- Kindergarten fees
- After-school care programs
- Summer camps and holiday programs
- Nursery and daycare costs
Private Childcare
- Registered childminders
- Nannies and au pairs (with proper employment contracts)
- Babysitting services (with receipts and proper documentation)
Requirements
- Both parents working: Or one parent working and the other in education/training
- Proper documentation: Receipts and proof of payment required
- Age limit: Child must be under 10 years old
- Registered providers: Childcare must be provided by registered/licensed providers
Additional Family-Related Deductions
Extraordinary Expenses for Children
Certain child-related expenses may qualify as extraordinary expenses:
Medical Expenses
- Therapy costs: Speech therapy, occupational therapy, physiotherapy
- Medical equipment: Glasses, hearing aids, orthopedic devices
- Special treatments: Not covered by health insurance
- Psychological counseling: For children with special needs
Educational Expenses
- Private school fees: If public education is not available or suitable
- Special education: For children with learning disabilities
- Tutoring: If recommended by school or educational psychologist
Single Parent Benefits
Single parents receive additional consideration in the Austrian tax system:
Single Parent Allowance (Alleinverdienerabsetzbetrag)
- Amount: €494 per year for one child, €669 for two or more children
- Eligibility: Single parents or families where one spouse earns less than €6,000 annually
- Automatic: Applied automatically when filing tax return
Increased Family Bonus Plus
- Additional amount: €500 per child for single parents
- Total benefit: Up to €2,500 per child (€2,000 + €500)
- Same eligibility: Must meet standard Family Bonus Plus requirements
Child Allowance (Familienbeihilfe)
While not a tax benefit per se, child allowance affects your tax situation:
Monthly Amounts (2024)
- Age 0-2: €120 per month
- Age 3-9: €128.90 per month
- Age 10-18: €149.70 per month
- Age 19-24: €174.70 per month (if in education)
Tax Treatment
- Not taxable: Child allowance is not considered taxable income
- Prerequisite: Required for claiming Family Bonus Plus
- Automatic payment: Paid monthly by the government
Planning Strategies for Families
1. Optimize Parent Allocation
- Higher earner: Generally should claim Family Bonus Plus
- Tax bracket consideration: Allocate to parent in higher tax bracket
- Splitting option: Can split between parents if beneficial
2. Maximize Childcare Deductions
- Document everything: Keep all receipts and contracts
- Plan expenses: Consider timing of payments for maximum benefit
- Eligible providers: Ensure childcare providers are properly registered
3. Consider Timing of Expenses
- Medical procedures: Time elective procedures to maximize extraordinary expense deductions
- Educational expenses: Plan major educational expenses strategically
- Equipment purchases: Time purchases of medical equipment or educational tools
Special Situations
Divorced or Separated Parents
- Primary residence: Child must live with claiming parent for more than 6 months
- Agreement required: Parents can agree on who claims benefits
- Court orders: May specify which parent claims tax benefits
- Documentation: Proper legal documentation required
Children with Disabilities
Additional benefits may be available:
Increased Family Bonus Plus
- Amount: Additional €500 per year for children with disabilities
- Eligibility: Child must have disability degree of at least 25%
- Documentation: Medical certification required
Enhanced Deductions
- Medical expenses: Often exceed extraordinary expense thresholds
- Special equipment: Wheelchairs, communication devices, adaptive technology
- Therapy costs: Physical, occupational, and speech therapy
International Families
- EU citizens: Generally eligible for same benefits as Austrian citizens
- Third-country nationals: May have limited eligibility depending on residence status
- Cross-border workers: Special rules may apply for workers living in neighboring countries
Common Mistakes to Avoid
1. Missing Documentation
- Keep all receipts: For childcare and medical expenses
- Maintain records: Of child's residence and support
- Proper contracts: For private childcare arrangements
2. Incorrect Allocation
- Double claiming: Both parents claiming same child
- Wrong parent: Not optimizing which parent claims benefits
- Timing errors: Missing deadlines for benefit claims
3. Overlooking Benefits
- Extraordinary expenses: Not claiming eligible medical or educational costs
- Single parent benefits: Missing additional allowances
- Disability benefits: Not claiming enhanced benefits for children with special needs
How to Claim Family Benefits
Annual Tax Return
- Form L1: For employee tax returns
- Family section: Complete all family-related sections
- Documentation: Attach required receipts and certificates
- Electronic filing: Use FinanzOnline for faster processing
Required Documents
- Birth certificates: For all children
- Childcare receipts: For deduction claims
- Medical certificates: For disability-related benefits
- School enrollment: For children over 18 in education
Conclusion
Austria's family tax benefits can provide substantial savings for families with children. By understanding and properly claiming all available benefits, families can significantly reduce their tax burden and improve their financial situation.
The combination of Family Bonus Plus, childcare deductions, and other family-related benefits can save families thousands of euros annually. Proper planning and documentation are key to maximizing these benefits.
Use our income tax calculator to see how family benefits affect your specific tax situation and potential refund.
This information is for educational purposes only. Tax laws can change, and individual circumstances vary. Consult with a qualified tax professional for advice specific to your family's situation.