Three children mean three times the happiness - but also three times the responsibility. As a parent, you know how quickly the family's needs grow: clothes, education, hobbies - and later perhaps a year abroad or a degree course. It's good to know that the state provides tax relief for families with several children. The so-called child allowance is a key instrument in the equalization of family benefits.
However, although many parents are aware of child benefit, they only have a vague idea of how child allowances actually work - and what benefits they really bring. It can be particularly worthwhile if you have three children.
This article provides you with all the important information in a clear and concise manner: What is the child allowance? What are the amounts for three children? What role does income tax assessment play? And how can you get the most out of it for you and your family? We'll also show you how you can plan flexibly for your children in the long term with a smart pension concept - like the one from Invest4Kids.
We'll help you find the right investment for your child!
What is the child allowance anyway?
Many parents rely solely on child benefit for financial support from the state. This is understandable - after all, it is paid monthly and is a fixed part of the family budget. But many people don't know this: With the child allowance, the state offers an additional opportunity to reduce the tax burden on your income - particularly relevant for middle to higher incomes.
The child allowance explained simply
The child allowance is a fixed amount that reduces your taxable income. The aim is to make your child's minimum subsistence level tax-free. This is regulated in the Income Tax Act (§ 32 EStG) and applies to every child entitled to child benefit.
🧾 Infobox - Components of the child allowance:
- Allowance for the material minimum subsistence level: 6,672 euros (for married couples jointly)
- Allowance for care, education or training needs (BEA): 2,928 euros
➡️ Total therefore: 9,600 euros per child and year
Child benefit or tax-free allowance - which applies?
This is where the so-called favorable tax assessment comes into play: The tax office automatically checks whether the child benefit or the tax-free allowances for children are more favorable for you as part of your income tax assessment. You don't have to apply for anything separately - the check is carried out automatically with your tax return (child annex).
🔎 Note: You will either receive child benefit or the tax advantage from the tax-free allowance - depending on which is more financially beneficial to you.
How high is the child allowance - and what does this mean in concrete terms for 3 children?
Having three children is not just an adventure in everyday life - it can also bring a whole host of advantages from a tax perspective. As a parent, you are entitled to tax-free allowances for each of your children, which reduce your income and thus lower your tax burden. With three children in particular, the amounts quickly add up to a noticeable advantage - provided you do everything correctly in your tax return.
The amounts at a glance
The following allowances for children apply for 2025:
You are entitled to 📌 per child:
- 6,672 euros for the material minimum subsistence level
- 2,928 euros for care, education or training needs
➡️ Total: 9,600 euros per child
👨👩👧👦 With three children, this results in a considerable amount:
- 28,800 euros, which can reduce your taxable income!
This relief is particularly noticeable if you have a medium or higher income. This is because the higher your taxable income, the greater the effect the deduction of allowances will have on the taxes you have to pay.
📊 Sa mple calculation
A family with three children and a joint taxable income of 90,000 euros can save over 5,000 euros in tax by taking the child allowance into account - compared to receiving child benefit alone.
Bottom line: figures that pay off
The amount of the tax-free allowances shows: If you have three children, you should use the full potential - by planning wisely, submitting the child investment in good time and having a precise understanding of your own family situation. This way, you can ensure that you don't give away a single cent.
To whom does the allowance apply - and for how long?
In principle, every parent who cares for a child is entitled to the child allowance - regardless of whether it is a biological child, a foster child, an adopted child or, in certain cases, a child living abroad. The decisive factor is that the child lives in your household or that you are at least mainly responsible for its upkeep. Even if the parents live separately, the allowance is usually split equally.
How long is the allowance granted for?
🧭 Time frame & prerequisites:
- In principle: from the month of birth until your child' s 18th birthday.
- Extension until 25 years of ageif:
- the child is in training or studying,
- it is in a transitional period between two training periods (max. 4 months),
- no training place has been found (proof from the employment agency),
- a Voluntary Social Year, Voluntary Ecological Year, Federal Volunteer Service or International Youth Volunteer Service,
- or a disability that prevents independent living.
📌 Tip: Even if your child no longer lives at home, they may still be entitled to tax-free allowances for children - the important thing is that the requirements of the Income Tax Act are met. So it's always worth checking.
Splitting, transferring or claiming allowances alone - this is how it works
As a rule, the child allowance is automatically halved and allocated equally to both parents - regardless of whether you live together or are separated. But what happens if you are a single parent or your child lives with you permanently? This is exactly when a transfer comes into play.
💡 Example:
If you are a single parent looking after the child and the other parent does not pay any maintenance, you can have the full allowance transferred to you.
Requirements for a transfer
- The other parent is not subject to unlimited tax liability (e.g. lives abroad permanently).
- He does not participate in maintenance payments.
- You live alone with your child in a shared household.
✅ How parents can use the tax-free allowance:
The transfer is not automatic. You have to apply for it at the tax office - preferably directly via the child annex in your tax return. There you also indicate whether you are entitled to half of the allowance or whether you are using the standard rule (half for both).
📌 Extra tip: Flexibility is also possible for spouses - for example, if only one partner earns income. In such cases, clarify in good time how the allowances can be optimally divided. This can mean hard cash!
Child allowance and tax return - what you need to consider
Even if the state provides generous allowances for children - they only have an effect if you file your tax return. And do so completely and correctly. This is the only way the tax office can check whether you benefit more from child benefit or the child allowance. This so-called favorable tax assessment is a mandatory part of every income tax assessment if you declare children in your tax return.
The child attachment - the central form
To ensure that your children are also included for tax purposes, you must complete the child annex. This contains information on the following points, among others:
📝 Important information in the child attachment:
- Personal data of your child
- Period in which it was registered with you
- Details of training, voluntary service, disability or stay abroad
- Information on foster children or other special situations
- Allocation of allowances between the parents
Attention with several children
If you have more than one child, you must complete a separate child annex for each one. If you have three children in particular, it's worth taking a close look - because the amounts that can reduce your income increase with each additional child.
📌 Tip: If in doubt, seek advice - e.g. from an income tax help service or a tax advisor. This can save you many questions and uncertainties, especially in more complex family situations such as a shared household or a stay abroad.
This way, you can make the best possible use of the allowance, not only formally but also financially.
Good support - but no all-round protection
The child allowance is undoubtedly a valuable building block in the equalization of family benefits. It helps you to reduce the burden on your income and avoid taxation of your child's minimum subsistence level. But even if the state does its bit here: The reality shows that tax-free allowances for children are nowhere near enough to cover all costs for the future in the long term.
👶 Typical costs that parents expect:
- School materials, tutoring, school trips
- Studies, training, first apartment
- Driving license, stays abroad, own dreams
And none of this usually happens when things are going well financially.
Pension provision is a matter of trust
If you really want to plan for the long term as a parent, you should also keep an eye on your child's personal provision in addition to taxes and allowances. After all, what seems cheap today may be expensive in ten years' time - keyword: education costs or rent prices.
📌 Remember: The child allowance is a sensible start - but no substitute for smart, forward-looking financial decisions. If you act early, you not only give your child financial security, but also real freedom to go through life in a self-determined way later on. And that's exactly what you want, isn't it?
We'll help you find the right investment for your child!
- An additional $25,703 per child, thanks to our modern ETF strategy
- Find the perfect ETF investment for your child in a 30-minute video conference from the comfort of your own home.
- Sit back and watch your child's assets grow – our experts will take care of the rest.
Financial provision with Invest4Kids - simple, flexible, clever
You're already taking advantage of the child tax allowance, have your tax return under control and use your child benefit to cover everyday expenses - but you realize that you need more to achieve your children 's really big dreams. A genuine, long-term financial strategy that suits you and your family. This is exactly where Invest4Kids comes into play.
More than just an ETF savings plan
Invest4Kids specializes exclusively in families. From as little as 25 euros a month, you can build up a solid cushion for your child step by step with us. You have a free choice from a wide range of sensible ETFsthat suit your goals - with no custody account fees, no transaction costs and no hidden catches.
✔ Advantages at a glance:
- No capital gains tax for strategy changes
- Tax-free reinvestments
- Only 50 % taxation for payouts after the age of 62
- "Right of determination from 18 " - you decide when your child has access
- Securing conditions protects against future tax changes
- Maximum flexibility for contributions, one-off payments and breaks
- Individual, free advice - tailored precisely to your life situation
What other parents say
💬 "We wanted to make provisions for our daughter, but didn't want to invest on our own. Invest4Kids gave us a clear plan - without any pressure." - Daniela, mom of 3 from Cologne
💬 "I think it's great that I can adapt everything - even if something changes for us. That's real family friendliness." - Tobias, father of twins
📌 Conclusion: Invest4Kids thinks along with you - tax-smart, true-to-life and absolutely flexible. This turns your pension provision into a real opportunity for your child's future.
Frequently asked questions from parents - simply explained
The child tax allowance raises questions for many parents time and again - here you will find the most important answers in a compact and understandable way:
- Do I have to choose between child benefit and child allowance?
No, the tax office will do this for you. When assessing your income tax, it will check which option is more favorable for you - this is called a favorability test. - Is the tax-free allowance also available for foster children?
Yes, under certain conditions. The foster child must live in your household and must not live in the same household as their biological parents. - Can I use the child allowance retroactively?
Yes, as long as you submit your tax return for the relevant years on time. - What if my child does voluntary service?
Whether it is a voluntary social year, voluntary ecological year, federal voluntary service or international youth voluntary service - the allowances continue to apply until the age of 25. - Do I need a separate child annex for each child?
Yes, a separate child annex must be completed for each child in the tax return.
Your children. Your future. Your decision.
Three children, three futures - and plenty of opportunities for you to support them financially. The child allowance is a powerful lever to significantly reduce your income and lower your tax burden. With the right planning, a look at the child annex of your tax return and a clear understanding of the existing allowances, you can save money every year.
But tax advantages are only part of the story. If you really want to offer your children long-term security - for education, a year abroad, a home or dreams - then a solid, flexible pension strategy is worthwhile.
📌 O ur tip: Use the advantages of the state - and combine them with the strength of Invest4Kids. This is how you turn a sense of duty into real prospects.
👉 Request afree consultation now and find out how you can shape your children's future in a tax-smart and emotionally meaningful way. You deserve it. And your children even more so.
We'll help you find the right investment for your child!
- An additional $25,703 per child, thanks to our modern ETF strategy
- Find the perfect ETF investment for your child in a 30-minute video conference from the comfort of your own home.
- Sit back and watch your child's assets grow – our experts will take care of the rest.
