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Tax allowance for children and the more-favourable assessment

Finanzamt · § 32 Abs. 6 EStG

FinanzamtAutomatic

The tax allowance for children (Kinderfreibetrag) is the tax alternative to Kindergeld (child benefit) – and the good news first: you do not need to apply for anything or make any choice. When assessing income tax, the Finanzamt (tax office) automatically carries out the more-favourable assessment (Günstigerprüfung) under § 31 EStG of the Income Tax Act (Einkommensteuergesetz) and applies whichever is better for you.

It consists of two amounts, which regularly causes confusion. Under § 32 Abs. 6 EStG, the allowance per parent for the child’s material minimum subsistence level is €3,414, and the allowance for care, upbringing or education needs (BEA, from the German Betreuung, Erziehung, Ausbildung) is €1,464. For parents assessed jointly, both amounts double: €6,828 plus €2,928, together €9,756.

Be careful with older overviews. The figure €9,312 is still very widespread – this is the 2024 figure, when the tax allowance for children was still €6,384. Anyone using that figure underestimates the allowance by €444.

Economically, the allowance only works out better than Kindergeld from higher incomes onwards, because it reduces the tax burden rather than paying out a fixed amount. Exactly where the break-even point lies depends on the individual case – and you do not have to answer this question yourself in any event.

Last updated27 August 2026
Legal basis§ 32 Abs. 6 EStG · § 31 · § 66
VerificationChecked against gesetze-im-internet.de (consolidated version)
Written and reviewed byAndrés Sánchez Botta
Independent information site: We are not the Familienkasse, not an authority and not paid advice — we do not submit applications for you. All information comes from official sources and is explained here in plain terms; the competent body is always authoritative. Not tax advice. The more-favourable assessment is carried out by the Finanzamt. All information provided without guarantee. We are neither lawyers nor tax consultants: we document administrative procedures and check the information against the official source — this is information, not legal or tax advice.
Together€9,756With two parents
Material subsistence minimum for a child€6,828€3,414 per parent
BEA allowance€2,928€1,464 per parent
ApplicationNot neededAutomatic more-favourable assessment
Required documents

What you need

The Anlage Kind (child annex) to the tax return

One per child. It is where the child-related information comes together – without it, the Finanzamt does not carry out the more-favourable assessment for that child.

The child’s tax identification number (Steuer-ID, IdNr.)

Required for allocation. It appears on the notification letter (Zuteilungsschreiben) from the Federal Central Tax Office, which arrives automatically after the birth.

Details of Kindergeld receipt

The more-favourable assessment offsets the Kindergeld to which an entitlement existed – not what was actually paid out. Anyone who failed to apply for Kindergeld therefore loses twice: no Kindergeld, and the offset still applies.

For children over 18: proof of education or training

As with Kindergeld, the age limits of § 32 Abs. 4 EStG apply: up to age 25 while in education or training, and after a first vocational qualification only if economic activity does not exceed 20 hours a week.

For separated parents: details of the transfer

Subject to requirements, half of the allowance can be transferred to the other parent – for example, from a parent who does not meet their maintenance obligation. This is a separate item on the Anlage Kind and is often overlooked.

Step by step

How to proceed

  1. 1

    Understand that you do not have to decide anything

    Kindergeld and the tax allowance for children are not alternatives between which you choose. You apply for Kindergeld, and when assessing tax the Finanzamt automatically checks whether the allowance would have been more favourable. If it is, it is applied and the Kindergeld is offset against it.

  2. 2

    Apply for Kindergeld all the same

    And you absolutely should. The more-favourable assessment offsets the entitlement to Kindergeld, not the actual payment. Anyone who has not submitted an application receives no Kindergeld – and still has the entitlement offset. This is the most costly mistake in this context.

  3. 3

    Complete the Anlage Kind in full

    One Anlage Kind per child, with the identification number and – for children over 18 – proof of education or training. Without the annex, no more-favourable assessment takes place for that child.

  4. 4

    If separated, remember the transfer

    In principle, each parent is entitled to half. Under certain requirements, half of the allowance can be transferred to the other parent, for example if one parent does not meet at least 75% of their maintenance obligation. Separate rules apply to the BEA allowance.

  5. 5

    Use the correct figure

    For the current year it is €9,756 in total. The widespread figure of €9,312 dates from 2024. If you are working with tax software or an overview, check which year it reflects.

  6. 6

    Check the notice carefully

    The tax notice states whether the allowance has been applied and how the Kindergeld has been offset. If something is incorrect, you can lodge an Einspruch (objection) within one month – free of charge.

Fee information

Costs and payment

The amounts in detailTwo allowances, one result
Material minimum subsistence level, per parent€3,414
BEA need, per parent€1,464
Material minimum subsistence level, doubled€6,828
BEA need, doubled€2,928
Together€9,756
Outdated figure€9,312 (2024)

The tax allowance for children consists of two amounts, and this is the most common source of confusion. § 32 Abs. 6 EStG sets, per parent, €3,414 for the child’s material minimum subsistence level and €1,464 for care, upbringing or education needs. For parents assessed jointly, both amounts double to €6,828 and €2,928 – together €9,756. The figure of €9,312 is still very widespread; this is the 2024 figure, when the tax allowance for children was €6,384 while the BEA allowance remained unchanged at €2,928. Anyone using the old figure underestimates the allowance by €444. You do not need to apply for anything: under § 31 EStG the Finanzamt carries out the more-favourable assessment of its own motion. One point deserves particular attention here: what is offset is the entitlement to Kindergeld, not the actual payment. Anyone who failed to apply for Kindergeld therefore receives neither the Kindergeld nor the full allowance – a double loss that can be avoided simply by applying in time.

Good to know

Important notes

It is €9,756, not €9,312. The older figure dates from 2024. Check which year overviews and tax software reflect.

You do not need to apply for anything or make any choice. The Finanzamt automatically carries out the more-favourable assessment under § 31 EStG.

Apply for Kindergeld all the same. What is offset is the entitlement, not the payment. Without an application you lose twice.

The allowance consists of two parts. The material minimum subsistence level and the BEA need are often confused, or only one of the two is mentioned.

No Anlage Kind, no more-favourable assessment. One per child, with the identification number.

If separated, a transfer is possible. For example, if one parent does not sufficiently meet their maintenance obligation. A separate item on the Anlage Kind.

The same age limits apply as for Kindergeld. Up to age 25 while in education or training, after the first vocational qualification only up to 20 hours a week.

The Finanzamt is competent, not the Familienkasse. The allowance is handled through the tax return; the Familienkasse only pays the Kindergeld.

Avoid these mistakes

Common mistakes

Assuming €9,312. This is the 2024 figure. Currently it is €9,756.

Not applying for Kindergeld because the allowance would be more favourable. The most costly mistake: what is offset is the entitlement, not the payment – you lose the Kindergeld and keep the offset.

Leaving out the Anlage Kind. Without it, the Finanzamt does not check, for that child, whether the allowance is more favourable.

Applying only one of the two allowances. The material minimum subsistence level and the BEA need are two separate amounts that work together.

Overlooking the transfer in the event of separation. If the other parent pays no maintenance, or too little, half of the allowance may be transferable.

Contacting the Familienkasse. The Finanzamt is competent for the allowance; the Familienkasse cannot decide anything about it.

Frequently asked questions

Questions and answers

How much is the tax allowance for children?

It consists of two amounts. Under § 32 Abs. 6 EStG, €3,414 per parent is allocated to the child’s material minimum subsistence level and €1,464 to care, upbringing or education needs. For parents assessed jointly, both amounts double: €6,828 + €2,928 = €9,756. Be careful with older sources: the widespread figure of €9,312 is the 2024 figure and is €444 too low.

Must I choose between Kindergeld and the allowance?

No, and you do not need to apply for anything either. Under § 31 EStG, when assessing income tax the Finanzamt automatically carries out the more-favourable assessment: it works out whether Kindergeld or the allowance is better for you, and applies whichever is more favourable. If the allowance is applied, it offsets the Kindergeld against it. So you simply apply for the Kindergeld and leave the rest to the Finanzamt.

What happens if I have not applied for Kindergeld?

Then you lose twice – and this is the most important sentence on this page. The more-favourable assessment offsets the entitlement to Kindergeld, not the payment actually made. Anyone who has failed to apply therefore receives no Kindergeld and still has the entitlement offset. So apply for Kindergeld in every case, even if you suspect the allowance will be more favourable for you.

From what income does the allowance become worthwhile?

No fixed threshold can seriously be given, and we deliberately do not give one. The allowance works by reducing taxable income, whereas Kindergeld is a fixed payment – where exactly the break-even point lies depends on the tax rate, the number of children, marital status and further deductions. The good news is that you do not have to answer this question: the Finanzamt calculates both and takes the better one.

Can I transfer the allowance to the other parent?

Yes, under certain requirements. In principle, each parent is entitled to half. Half of the allowance for the material minimum subsistence level can be transferred to the other parent if one parent substantially fails to meet their maintenance obligation; separate rules apply to the BEA allowance (for care, upbringing or education needs), for example for minor children who are registered with only one parent. This is a separate item on the Anlage Kind and is often overlooked by separated parents.

Do the same age limits apply as for Kindergeld?

Yes, these are the same rules from § 32 Abs. 4 EStG. Up to the 18th birthday with no further requirements, after that up to the completed 25th year of life while in education or training. And here too the restriction after a first vocational qualification or first degree applies: the child continues to count only if they do not pursue economic activity exceeding 20 hours a week – training relationships and marginal employment excepted. If the entitlement lapses, both lapse: Kindergeld and the allowance.

Who is competent — the Familienkasse or the Finanzamt?

For the tax allowance for children, the Finanzamt, as part of the income tax assessment. The Familienkasse pays the Kindergeld and cannot decide anything about the allowance. This page exists here because the two benefits are economically connected and are offset against each other through the more-favourable assessment – but the route runs through the tax return, not through an application to the Familienkasse.

Do I need to submit a tax return for this?

For the more-favourable assessment, yes – without an income tax assessment (Veranlagung) it does not take place. A Anlage Kind is required per child, with the tax identification number and, for children over 18, proof of education or training. If you do not need to submit a tax return anyway and your income is low, this is no loss: in these cases Kindergeld is regularly the more favourable option, and you receive it independently of the tax return.

Related official procedures

Kindergeld (child benefit)
Definitely apply
€259
Kinderzuschlag (child supplement)
With low income
Up to €297
Tax return
Where the Anlage Kind belongs
Free of charge

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