Tax breaks for holiday childcare expenses
In Germany, parents who require childcare during school holidays or vacation periods can potentially claim expenses related to supervised childcare programs as tax-deductible. These expenses can be considered either as "household-related services" (Haushaltsnahe Dienstleistungen) or as extraordinary burdens under certain conditions.
To be eligible for tax deductions, the child must be under 14 years old, and the childcare program should take place during school holidays or vacation periods.
Costs for supervised childcare programs or holiday camps aimed at children’s care qualify for tax deductions. This includes fees paid for organized vacation care, professional caregivers, or daycare during holidays. Up to 20% of the eligible costs can be deducted, with a maximum limit of €4,000 per year per household for household-related services (including occasional childcare).
For the deductions to apply, the childcare must help the parents earn income or manage their employment, such as during work hours. The payments must be properly invoiced and paid in a traceable manner, typically requiring bank transfer. Costs that are reimbursed or covered by third parties (e.g., employer or insurance) cannot be deducted.
Keep invoices or contracts clearly stating the nature of the childcare service, and proof of payment (bank statements) to confirm actual expenses are necessary. Private babysitting may be more restricted in deductibility unless it is part of an official vacation childcare program.
If the childcare service qualifies under "household-related services," the deduction is applicable separately from other children-related tax allowances or benefits. For exact details and personal advice, Lohi recommends consulting their tax advisors or reviewing the latest tax guidelines for the relevant year, as regulations can change.
It is essential to note that the tax bonus typically ends from the age of 14. If parents are separated, the childcare costs can only be claimed by the parent with whom the child is registered. For children with a disability, the age limit does not apply if the disability occurred before the age of 25.
Various vacation programs are available for children, some of which can have tax deductions according to Lohi. Activities such as crafts, games, sports, and excursions are examples of activities that would not raise objections from tax offices. Football or tennis camps, language holidays, and programs focusing on knowledge or skills are not tax-deductible.
If grandparents provide vacation care and are paid for it, they must be registered with the Mini-Job Center and paid according to a contract via bank transfer for parents to claim the expenses. This only applies if the grandparents do not live in the same household, making them equivalent to day mothers, babysitters, or au pairs.
For tax deduction purposes, the primary focus of the vacation program should be on the pure care of the child. The invoice for vacation care expenses must be issued in the parent's name, contain the exact wording "vacation care," and not be paid in cash.
Working parents often face challenges with childcare during these extended vacations. Students in Germany receive approximately 13 weeks of vacation per year, making it crucial for parents to understand their tax deduction options. For more detailed information, it is recommended to consult Lohi's official guidance or a tax advisor.
Sports camps, such as football or tennis camps, are not eligible for tax deductions, as they do not qualify as household-related services or extraordinary burdens. Personal-finance matters, like saving for college or retirement, are also separate from the tax deductions for supervised childcare programs during school holidays or vacation periods.
