Tax refund for families: who benefits and who remains empty-handed?

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A family with two children wishing to benefit from the maximum tax reduction of 809,000 forints per person (2,300 euros each) should earn a total of 14 million forints per year or an average gross salary of 7 million forints per person and per year. According to the financial portal azenpenzem.huthose with higher wages who were unable to claim all child benefits in the last tax year may be the best off.

This article originally appeared on our sister site, Ungarn Heute. Translated by Julia Tar.

According to the government, parents eligible for the family tax benefit can recover up to 809,000 forints for each tax paid. If both parents are eligible, together they can recover a maximum of 1.6 million forints (about 4,600 euros). However, each parent will only receive the amount of tax paid that exceeded the family tax credit in 2021. Those who believe that the maximum amount of 809,000 forints is accessible to all may be disappointed, warns Napi.hu.

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Who can benefit from the government initiative?

If a married couple with two children earns at least 7 million HUF gross per year (583,000 HUF gross per month/ 1,650 EUR) or more and their gross salary amounts to at least 14 million HUF per year (39,600 EUR ), then in addition to the family tax credit they jointly claim, they have still paid enough tax to receive the maximum refund of HUF 809,000 each, making a total of HUF 1.6 million.

Who is left empty-handed?

It is possible that a father of three children earning well above the average salary (more than 482,000 forints/ 1,360 euros) with a gross salary of 660,000 forints, or a mother with children will end up receiving no forints from the measure because the family tax credit has already reimbursed all the social security contributions due, so there are no more taxes to reimburse.

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Anyone raising three children alone will not receive any reimbursement if their gross monthly salary is less than 660,000 forints. But the same is true if the gross monthly salary of both parents in a family of three children is the same. They don’t get anything either.

In fact, it is those earning well above the average Hungarian salary who can make the most of this opportunity due to the already claimed family tax credit.

However, if two parents are entitled to the family tax credit, there is the possibility of benefiting from tax credits if they are distributed in an optimal manner between them. Of course, this can only be claimed in the annual tax return. This will therefore be advantageous for all those who can or must share the family tax credits.

Featured image via Pixabay


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