Tax credits for families with multiple children are increasing
The new Income Tax Act is introducing higher annual tax credits in the 2021 tax year for a second, third, and additional child.
The tax credit for a second child is increasing from CZK 19,494 to 22,320 per year, and for additional children from CZK 24,204 to 27,840 per child per year. These changes were approved retroactively for the entire 2021 tax year. The credit for the first child remains unchanged at CZK 15,204 per year.
Transitional provisions of the amended act allow the new annual tax credit for a second and additional child to be claimed for the entire 2021 tax year, but not until the submission of a personal income tax return or in the annual tax calculation for the 2021 tax year. This change cannot be applied in the monthly calculation for advance tax on employment income until January 2022. For the remainder of 2021, the monthly tax credit amount for a second, third, or additional child will continue to be calculated as it has up to now.