Child tax bonus 2021: Income Tax Act No. 595/2003 Coll.

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Under the amendment effective from 1 July 2021 /Section 52zzj/, the child tax bonus was increased for a dependent child who has reached six years of age but not yet 15 years of age. If the conditions of Section 33 of the Income Tax Act are met, the taxpayer may claim the bonus for such a child for July–December 2021 in the amount of 1.7 times the basic child tax bonus; the increased bonus in 2021 amounted to €39.47. Amendment No. 257/2021 Coll., effective from 1 August 2021, added a condition: the taxpayer is not entitled to the increased bonus if, for the relevant calendar month, a subsidy to support the development of a child’s eating habits was provided /a meal subsidy under Section 4(3)(c) of Act No. 544/2020 Coll. on subsidies/.

The Financial Directorate of the Slovak Republic issued an interpretation on this issue /which, in our view, does not correspond to the applicable legislation/. According to the Financial Directorate’s interpretation, an eligible person who claims a meal subsidy automatically loses entitlement not only to the increased child tax bonus but also to the basic child tax bonus.

Summary of the child tax bonus amounts in 2021:

• basic child tax bonus = €23.22,
• child tax bonus for children under 6 = €46.44,
• increased child tax bonus for children aged 6 to 15 = €39.47

Effective from 1 January 2022 /Section 33/, the coefficient for the increased child tax bonus for a child aged 6 to 15 increases from 1.7 to 1.85 times the basic child tax bonus. The basic child tax bonus for 2022 is increased under Section 52zd(7) of the Income Tax Act by the same coefficient as the increase in the subsistence minimum on 1 July 2021.

The child tax bonus may be claimed not only by a taxpayer with unlimited tax liability /a tax resident/, but also by a taxpayer with limited tax liability /a non-resident/, if at least 90% of that taxpayer’s total taxable income for the relevant tax period comes from sources in the Slovak Republic. A resident may claim the bonus from an employer during the tax period. A non-resident is limited by the condition above and may claim the child tax bonus only after the tax period ends, provided that the condition concerning taxable income from Slovak sources compared with worldwide income is met.

The child tax bonus is available to a taxpayer who has earned taxable employment income of at least six times the minimum wage /six times the 2021 minimum wage = €3,738.00/, or taxable income from business or other self-employment of at least six times the minimum wage while also reporting a tax base /not reporting a tax loss/. For determining entitlement to the child tax bonus in 2021, the taxpayer may include pandemic assistance contributions in total taxable income /pandemic care or sickness benefits, First Aid and First Aid Plus contributions—which are tax-exempt income/.

The second condition for entitlement to the child tax bonus is that the child lives with the taxpayer in a common household and meets the statutory definition of a dependent child under Act No. 600/2003 Coll. on child allowance, as amended. The taxpayer must be able to prove these facts.

Finally, under Section 36(7) of the Income Tax Act, an employee must notify the employer of all facts affecting entitlement to the child tax bonus. Changes must be reported by the last day of the calendar month in which the change occurred, for example when a meal subsidy begins to be received.