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Guide on Reducing Your Income Tax as Parents

Guide on Reducing Your Income Tax as Parents

Last Updated on February 4, 2024 by Parentology

No one enjoys paying taxes, especially as parents. Whether you have one kid or have a bunch, chances are you are already up to your eyeballs in expenses. Fortunately, there are a multitude of options you can use to save some money and even reduce your income tax along the way. This will further help you prepare for your children’s future and for your own retirement.

Here are a few ways that can help you save some money:

Grandparent Caregiver Relief

The first option is called the Grandparent Caregiver Relief or GCR. If you are hands on with your children or have a happy marriage, this option may not be very useful for you. However, if you are a single mum, then this could help you out. If your parents or even your grandparents are helping you watch your kids, you can claim one of them as a caregiver for $3,000. That can pay for a lot of diapers!

In order to use this program, there are a number of conditions you need to meet first and they are:

  • You have to be a working mother that is either married, widowed, or divorced.
  • Your parents or grandparents must have lived in Singapore for at least 8 months.
  • Your parents or grandparents must be taking care of your children.
  • Your children need to be Singaporean and 12 years old or younger.
  • Men are not eligible for this program

Parenthood Tax Rebate

It is no secret that the Singaporean government is actively trying to increase the birthrate within the country through a number of incentives, such as the Baby Bonus. However, another incentive they offer is called the Parenthood Tax Rebate or PTR. You will be able to claim this once after a year has passed since your child’s birth.

This will give you a tax deduction anywhere from $5,000 to $20,000 depending on the birth order of your child. You can also split this between each parent and if you still have a rebate balance remaining, you are free to use itin the future for further tax relief.

There are a few conditions you need to abide by in order to take advantage of this program and the tax rebates, such as:

  • You need to be a Singaporean resident that is married, divorced, or widowed within the year of your child’s birth.
  • If you give up your child for adoption, you will not be eligible for the PTR.
  • Child needs to be born on or after 1 January, 2008
  • If you are interested in learning more, you can check out this program here

Qualifying Child Relief

This is a program designed to help parents support their children. So their kids can focus on their education and become a full-time student, rather than trying to find work. On the surface, this program looks like a great way to get some money to help your kid with their studies but it will make sure your child is able to find the opportunities they need for a better life. The Qualifying Child Relief or QCR can provide up to $4,000 per child. These funds can be shared between you and your partner.

There are a number of conditions you will need to meet in order to use this program, such as:

  • The child has to be born to you and your spouse
  • The child can be legally adopted or a step child
  • The child needs to be under 16 years old and a full-time student.
  • The child does not have a yearly income exceeding $4,000
  • The child is not physically or mentally handicapped. If they are, they will qualify for a different program called the Handicapped Child Relief or HCR, which you can learn about here

Working Mother’s Child Relief

This provides income tax reliefs ranging from 15% to 25% of your income. The number of children you have also plays a role in how much relief you get. This program is designed to encourage parents with children who are Singaporean citizens to get their own citizenship, as well as rewarding married mothers who are still working, even with children.

In order to qualify for the Working Mother’s Child Relief or WMCR, you need to meet these conditions:

  • You need to be a working mother who is either married, divorced, or widowed.
  • You need a taxable income. This income can come from your vocation or profession, business, or from trade.
  • You need to take care of a child that is a Singaporean citizen, who meets the criteria for the Qualifying Child Relief program.

This is a great option for some financial relief because you can claim a maximum of $50,000 per child, if you claim using both the Qualifying Child Relief and the Working Mother’s Child Relief programs! This is an effective option for reducing income tax.

Make sure you take these programs into mind before you submit your next income tax declaration form! If you have not been taking advantage of these programs yet, you are missing out on a lot of money, relief, and rebates. Take some time and see if you qualify for any of the programs and use them.

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