Tax benefits for children

What is tax relief used for?

Tax relief is available for children and children with disabilities for income acquired in 2022. The amount of the relief for children for 2022 depends on their number, for one minor child it is BGN 6,000 (up to BGN 600), for two - BGN 12,000 (up to BGN 1,200). and for three and more - BGN 18,000 (amount to receive up to BGN 1,800).

The amount of the tax relief for children with disabilities is BGN 12,000 (amount to be received up to BGN 1,200)

Who can benefit from tax relief?

Tax reliefs can be enjoyed by local or foreign natural persons established for tax purposes in an EU member state or in another state party to the agreement on the European Economic Area /EEA/ if, as of December 31, 2022, it is:

• a parent who is not deprived of parental rights, and the child is not placed outside the family, and no guardianship or guardianship has been established, or

• guardian or custodian – in the case of established guardianship or guardianship, or

• a member of the family of relatives or relatives - when placing the child with relatives or relatives, in the sense of the Child Protection Act, for a period not shorter than 6 months, or

• foster parent - in case of long-term placement of the child to be raised in a foster family in the sense of the Child Protection Act.

An important condition to take advantage of the child tax credit is that you have no unpaid public debts subject to enforcement.

Parents who used maternity leave throughout 2022 cannot benefit from tax relief, as the income they received is tax-free, i.e. have not paid tax for which the relief can be used. In this case, the tax relief can be used by the other parent.

Parents of a child with a disability can benefit from both tax reductions at the same time - for a child and for a child with a disability. The benefits can be enjoyed by one parent or shared between both parents.

Tax relief can also be used by a parent who has not been granted the exercise of parental rights in cases of divorce, when all the necessary conditions are met.

For which children can tax relief be used?

Tax relief can be used when, as of 31.12.2022 the child:

• is a resident of an EU member state, or of another EEA state;

• has not reached the age of majority. The tax relief can also be used for a child who has reached the age of majority or was born in 2022.

• is not placed in a social or integrated health-social service for residential care at full state support, in a home for children deprived of parental care, or in a home for medico-social care for children.

In the event of the child's death, these terms apply as of the date of death.

Ways to use tax benefits

• through the employer under the main employment relationship of natural persons, as of December 31 of the tax year;

• by personally submitting an annual tax return.

Necessary documents to receive tax relief

• declaration for the use of tax relief for children according to a model;

• a declaration for the use of the tax relief for children with disabilities according to a model, as well as a copy of a valid decision of the child's TELC/NELC.

• a written declaration, a Certificate from the National Revenue Agency, valid for 1 month, or a note in Part I, line 6 of the declaration for the use of tax benefits for children, that there are no enforceable public obligations or that for the tax year he will submit an annual tax return.

Deadlines for submitting a Declaration for tax benefits

In order to use the tax benefits for children and for children with disabilities with the employer under the main employment relationship, the worker/employee shall submit the necessary documents within the period from November 30 to December 31, 2022.

Until January 31, 2023 the employer calculates and refunds the employee's tax allowance.