For taxpayers with children in Poland, additional tax deductions and benefits apply. Preferential taxation of taxpayers – parents with children depends on the size and sources of income of parents and children, the age of children, the availability of studies, the receipt of benefits, etc. The article below provides the conditions for taxing the income of taxpayers – parents with children.

For taxpayers with children in Poland, the following common tax deductions (benefits) apply: “zero” tax for families with 4 or more children (PIT-0 dla rodzin 4+), family tax deduction (ulga prorodzinna) and single parent tax credit (osoba samotnie wychowująca dziecko).

"Zero" tax for families raising 4 or more children (PIT-0 dla rodzin 4+) applies to the exemption of income from personal income tax if they are received under an employment contract, agency agreement, housework, cooperative relations, entrepreneurial activities (except for the tax card) or as maternity benefits.

The tax relief is granted up to the amount of income not exceeding PLN 85,528 in the tax year for one parent or a married couple (for each parent). In addition, it remains possible to additionally apply a non-taxable amount of PLN 30,000 per year for each taxpayer.

The exemption is granted to the taxpayer (regardless of his marital status) if he acted as a parent, legal guardian or acted as a foster family.

The exemption may be granted to the taxpayer in respect of minor children, adult children aged 25 who are studying or, regardless of age, a child receiving a care allowance (social pension).

The condition for using the tax relief in the case of adult children, studying under the age of 25, is that they did not receive income during the tax year in the form of a linear tax (podatek liniowy), a single (lump-sum) tax (ryczałt), a tax card (karta podatkowa), tonnage tax, tax in the field of shipbuilding and ship reconstruction. An exception is income received from private rentals. In addition, there should be no receipt of income subject to the tax scale or 19% tax associated with capital gains. It should also be taken into account that the limit of PLN 85,528 is common for other tax benefits: for young people under the age of 26 returning to the country and for pensioners. The income limit for children in 2022 is PLN 16,061.28 (twelve times the social benefit of PLN 1,338.44).

The exemption can be used during the year when the taxpayer calculates advance payments (with the submission of an application for the fulfillment of the conditions for applying the exemption) or when submitting an annual tax return.

The family tax deduction (ulga prorodzinna) allows you to reduce the "family" tax on the income of taxpayers – parents with children. Legal guardians and foster families are also eligible for this benefit.

There are several conditions for receiving a tax deduction.

1. The child must be a minor, or receive a social pension (care allowance), or be under the age of 25 and be studying; his income must not exceed PLN 16,061.28 in the tax year 2022 (twelve times the social benefit of PLN 1,338.44).

2. Income of taxpayers should be taxed in accordance with the tax scale or at a rate of 19%, for example, from financial activities.

The exemption cannot be used if the taxpayer receives income only from entrepreneurial activities in the form of line tax (podatek liniowy), single (lump) tax (ryczałt), tax card (karta podatkowa), tonnage tax, shipbuilding and ship reconstruction tax. However, if, in addition to such income, the taxpayer also receives income that is taxable in accordance with the tax scale (for example, wages, sickness benefits, private rental income), the right to tax relief remains.

3. It should be noted that the child is an independent taxpayer with his own income and property. The income of a child for the purposes of applying the "family" tax allowance should also not be subject to the provisions of business income in the form of a line tax (podatek liniowy), a lump-sum tax (ryczałt), a tax card (karta podatkowa), tonnage tax, tax in the field of shipbuilding and ship reconstruction. This condition does not apply to children who receive income from private rentals or other similar contracts subject to a lump-sum tax (ryczałt).

4. An income limit applies in the tax year for a taxpayer who exercised parental rights, acted as a legal guardian or as a foster family, only in relation to one minor child with a limit on the amount:

• PLN 112,000 for spouses (spouses' incomes are summed),
• PLN 112.00 if the taxpayer is a single parent,
• PLN 56,000 if the taxpayer is not married.

If parental responsibility was exercised in relation to two or more children, the benefit is provided regardless of the amount of income received by the taxpayer.

5. Amount of tax relief: for the first child the tax is PLN 92.67 per month (PLN 1,112.04 per year), for the second child – PLN 92.67 per month (PLN 1,112.04 per year), for the third child – PLN 166.67 per month (PLN 2,000.04 per year), for the fourth and subsequent child – PLN 225 per month (PLN 2,700 per year).

Example. Taxpaying parents have two minor children and one student aged 24 with an annual income of PLN 15,000 (less than PLN 16,061.28). In the tax year, the total income of the spouses was PLN 150,000. In such circumstances, they are entitled to a tax relief for three children without a limit of PLN 112,000 on income. The amount of the tax relief is PLN 4,224.12: for each month during the tax year (3 children): PLN 92.67 + PLN 92.67 + PLN 166.67 = PLN 352.01 / month * 12 months.

It is possible to return unused benefits that the taxpayer could not deduct, for example, due to low income (salary). In this case, the taxpayer (the spouse of the taxpayer) on the PIT-36(37) return may be refunded the difference between the amount of the deduction due in connection with the benefit and the amount of the deduction in the tax return (not more than the amount of contributions to social and medical insurance) minus the previously withheld / shown deductions (in PIT-36L, 28 / PIT-16A, 19A).

Example. The taxpayer has income from an employment contract (PIT-37) and his spouse has income in the form of registered income (PIT-28). They have two common children. The taxpayer's contributions to social and health insurance for the year amounted to PLN 2,000.00, the tax benefit was PLN 2,224.08. To take full advantage of this deduction, the taxpayer files a joint tax adjustment with the spouse. The taxpayer's spouse paid PLN 500 health insurance premiums in 2022, of which PLN 200 was taken into account in the PIT-28 declaration. Then the taxpayer has the right to deduct PLN 300 (up to the limit of PLN 224.08) in the PIT-37 declaration.

The family tax deduction is claimed on the PIT-36(37) annual return with the PIT/O attachment.

The single parent raising tax deduction (osoba samotnie wychowująca dziecko) applies to a parent or legal guardian who is an unmarried woman (man), widow (widower), divorced (divorced) or married person whose spouse is deprived of parental rights or is serving a prison sentence. A single parent is a person who takes care of the child in fact, in a specific situation and time.

Preferential taxation applies to the income of one taxpayer raising children in the tax year, which will include minor children, adults receiving a care allowance (surcharge) or social pension, adults under the age of 25 who are studying.

The taxpayer must receive taxable income in the tax year on a common basis using the tax scale (12% and 32%) and submitting a declaration using the PIT-36(37) forms.

Conditions for applying the tax relief::

1. The child must be under the constant care of only one parent.

2. Preferential taxation does not apply if an adult child under the age of 25, who is studying, received income (with the exception of a survivor's pension):

• which is subject to tax under the general rules or tax at a rate of 19%, for example, on financial activities,
• over PLN 16,061.28 in 2022.

This limit does not apply to other income and sources of income.

3. Preferential taxation does not apply to income from entrepreneurial activities of parents and children under the provisions of the line tax (podatek liniowy), single (lump) tax (ryczałt), tax card (karta podatkowa), tonnage tax, tax in the field of shipbuilding and ship reconstruction.

On the other hand, if a parent or child conducts a business activity that is taxed according to the tax scale (12%, 32%), then the right to preferential taxation remains subject to the adult child’s income limit of PLN 16,061.28 in 2022 (for a minor child, the limit on income does not apply).

Example. The taxpayer is a single parent. Neither the taxpayer nor his child is engaged in entrepreneurial activity. The child of the taxpayer is 18 years old, he is studying. The child is paid a pension (for disability from the father) in the amount of PLN 1,000 per month. In the tax year, the child received income from work in the amount of PLN 15,000. In these circumstances, the taxpayer can pay the tax together with the child, despite the fact that the child's income exceeds PLN 16,061.28 per year (disability pension + income from work), since the pension is not included in this limit.

The preferential taxation of the income of a single parent is based on determining the tax in the double amount of the calculated tax (12%, 32%) on 1/2 of the income. That is, single parents, like spouses, can use double the amount of the minimum non-taxable income of PLN 30,000 in 2022, that is, PLN 60,000.

Example. The income of a single parent is PLN 70,000 gross per year. Comparison of tax amounts payable:

The taxpayer (employee) can submit an application to the payer (employer) about the intention to settle jointly with the child during the year (from July 01, 2022) and reduce the amount of advances from income (salary). A preferential tax calculation can also be made on the PIT-37(36) annual tax return.

Additional conditions for the application of tax deductions and benefits by individual taxpayers in 2022 for income tax can be viewed at the link.