Combined tax credit for parents of children under 12 years of age (IACK) - Nalog.nl BV

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Combined Tax Credit for Parents of Children Under 12 (IACK)

16.02.2024

From 2024, the rules for using the Income-related Combined Tax Credit (Inkomensafhankelijke combinatiekorting - IACK), which is available to working parents of children under 12 years of age, have changed. Tax credits (korting) are deducted directly from the assessed tax and allow you to significantly reduce it, so you need to make full use of all the tax benefits available to you.

Who is eligible for IACK?

Both natural and adoptive parents of a child under 12 years old receive a combined discount. The discount is available for a year, so to qualify for IACK it is important that the child is under 12 years of age on 31 December of the year preceding the reporting year. The number of children of this age does not affect the size of the discount.

For the purposes of obtaining IACK, the following are taken into account:

  • Your relatives and adopted children. If a family receives state benefits for raising stepchildren, they are not entitled to IACK.
  • Children from previous relationships of your spouses or registered partners.
  • Children of tax partners living with you. 

Important! The right to a discount is given to one of the parents (partners) - the one who earns less. If the earnings are the same, the partner who is older in age receives the right to IACK. 

Conditions for receiving IACK

To be eligible for a combined discount, you must meet the following conditions:

  1. Your child was under 1 years of age as of January 12 of the reporting year.
  2. Your child is registered at your address for at least 6 months in the reporting year. If you and your ex-partner have agreed on an approximately equal (at least 156 days a year) distribution of responsibilities for the daily care and upbringing of the child, the child can be registered at the former partner’s address. If the condition of 6 months of joint registration is not met due to the death of a parent or child, the right to a discount remains. In the cases described in section 4.5 Decisions on tax credits when calculating income and wage taxes, the right to IACK can be obtained by parents who are not registered with the child at the same address during 6 months of the reporting year. 
  3. Your earned income must exceed a fixed amount (in 2024: €6073 per year; in 2023: €5548; in 2022: €5220).
  4. You had a tax partner for at least 6 months in the reporting year and your income was lower than his.

If you and/or your partner reside abroad (in the EU, European Economic Area (EEA), Switzerland, and in the jurisdictions of Bonaire, St Eustatius or Saba) and would be considered tax partners if living in the Netherlands, you are entitled to IACK , if your income is less than that of your partner, and other conditions are met.

Changes to the IACK provision scheme in 2024 concern specifically rules for establishing joint equal upbringing of children, specified in paragraph 2 of this list.  

IACK discount amount

The discount amount depends on your income.

2024 year:

Labor income IACK for persons under retirement age IACK for people who are at retirement age all year
up to 6074 euros No No
from 6074 euros to 31 euros 11,45% x (income from work – 6073 euros) 5,90% x (income from work – 6073 euros)
from 31 838 euro 2950 euro 1522 euro

Source

2023 year

Labor income IACK for persons under retirement age IACK for people who are at retirement age all year
up to 5548 euros No No
from 5548 euros to 29 euros 11,45% x (earning income – 5547 euros) 5,90% x (income from work – 5547 euros)
from 29 076 euro 2694 euro 1389 euro

Source

2022 year

Labor income IACK for persons under retirement age IACK for people who are at retirement age all year
up to 5220 euros No No
from 5220 euros to 27 euros 11,450% x (income from work – 5219 euros) 5,921% x (income from work – 5219 euros)
from 27 350 euro 2534 euro 1311 euro

Source

A combined discount is just one of many options for discounts and deductions that reduce the tax base and are also applied according to circumstances. To avoid confusion and get all possible tax benefits, entrust filing your tax return to our specialists!

If you want to receive tax refunds monthly, Order our service for preparing an advance report!

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