Do you know the tax benefit of your child maintenance payments?

Unfortunately there’s a high number of foreigners in Finland living apart from their children and seeing them only from time to time. If your children are underaged and do not permanently live at your home you usually have the obligation to pay child maintenance to support them.

When can you deduct child maintenance payments in taxation?

What is the tax benefit after all?

Unlike as with usual tax deductions where you reduce your taxable income, the benefit here is a so-called tax credit. A tax credit does not reduce taxable income but directly reduces your payable taxes. 

The credit is 1/8 of the amount of child support you have paid. However, the maximum amount of credit is €80 per year for each underaged child.

Example: 

You have children aged 3 and 6 years living at your former spouse’s home. You have a written agreement on a monthly maintenance of 60€ per month per child. On a yearly base you thus paid 60€ x 12 = 720€ per child.

1/8 of 720€ = 90€   , whereas the maximum tax credit is 80€ per child per year.

You can apply the maximum tax credit of 80€ per child, i.e. you save altogether 160€ in taxation every year.