Tax relief for children in Bulgaria

All about the tax deduction for children in 2024 and one-time allowance - calculator, how to fill out a declaration, TELK, child allowance and much more!
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Tax relief for children in Bulgaria
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In today's dynamic economic environment, awareness of tax breaks and social benefits is essential for every parent. In 2024, parents in Bulgaria are faced with a number of issues related to tax deductions for children and the conditions for receiving child benefits. Understanding the process for applying for tax breaks and allowances can significantly ease the financial burden on families, providing them with additional means of raising and educating their children.

According to the latest amendments to the State Budget Act, the amount of tax deductions for 2024 remains unchanged from the previous year, but it is important to note that the presence of unpaid public obligations does not allow to use them!

In order to claim and benefit from a tax deduction for children in 2024, it is mandatory for you to NOT HAVE public debts unpaid - unpaid taxes, insurance, fines, local taxes and fees!

On the other hand, maintaining the amount of child benefits is another step towards supporting families, with the new income threshold for receiving them set at BGN 710 per person in the family. There are also significant changes that introduce additional conditions for families with income between BGN 710.01 and BGN 810, receiving 80% of the full amount of allowances.

It is important for parents to be aware of the deadlines and necessary steps for filing a tax deduction declaration, as well as the conditions for receiving child benefits. We also provide information on online tools, such as tax deduction calculators and child allowance checkers, that make it easier to prepare and plan.

In this article, you will learn how to fill out a tax deduction declaration for children for 2024, including deadlines, necessary documents and a sample, and find out the amount of child benefits and the conditions for receiving them!

What is a “tax deduction for children” and how is it calculated?

The tax deduction for children is an opportunity for resident individuals and non-resident individuals established for tax purposes in a Member State of the European Union or another country party to the Agreement on the European Economic Area to reduce their tax base. This is done by deducting certain amounts from their annual tax bases, the amount of the relief depends on the number of children:

Amount of tax deduction for children in 2024

  • 6 000 BGN, - for 1 child under the age of majority (i.e. up to 600 BGN for receipt)
  • 12 000 BGN - for 2 children under the age of majority (i.e. up to 1200 BGN per receipt)
  • 18 000 BGN - for 3 or more children under the age of majority (i.e. up to 1800 BGN per receipt)
  • Tax relief for children with disabilities12 000 BGN(i.e. total up to 1200 BGN for receipt)

In order to benefit from the tax deduction, several conditions must be present at the same time:

  1. To 31 december in the tax year, the child must be a resident of an EU Member State or another country party to the Agreement on the European Economic Area.
  2. Children must not have reached the age of majority.
  3. As of December 31 of the tax year, the child must not have been placed in a social or integrated health and social service for resident care on full state support.

Filing and filling out a declaration for the use of a tax deduction

The tax deduction may be enjoyed by a parent who is not deprived of parental rights, a guardian, a trustee, a member of the family of relatives or relatives, where the child is placed with them for a period of not less than 6 months, or by a foster parent in the case of long-term placement of the child for foster care. The use of the tax deduction is limited to the amount of annual tax bases and is subject to declaration in accordance with the established order.

How to fill out a declaration for the use of a tax deduction for children?

In order to fill out the declaration for the use of a tax deduction for children, the declarant must provide complete personal data about himself and about the children for whom the benefit is sought. It includes information about the place of residence, personal identification number and the fact that as of December 31 of the tax year the child was not placed in a social or integrated health-social service for resident care on full state support. It must also be declared that the other parent or legal representative did not benefit from the tax deduction for the same tax period. Documents proving the right to relief are attached and the declaration is submitted to the relevant territorial directorate of the NRA or to the employer, as the case may be.

Can I file the tax deduction declaration through the employer?

Yes, you can file the tax deduction declaration for children through your employer. This process makes it easier for parents who want to take advantage of the benefits without having to go directly to the National Revenue Agency (NRA). The procedure includes the following steps:

  1. Deadline for submission:Parents must submit to their employer declarations for the use of tax benefits for children, as referred to in Art. 22c, para. 8 of the Personal Income Taxes Act (ZDFL) and, if applicable, under Art. 22d, para. 7 of the ZDDFL (for children with disabilities), in the period from November 30 to December 31, 2024
  2. Filling out the declaration:In Part I of the return, on line 6, the parent must indicate that as of the filing date there are no enforceable public obligations or that he will file an annual tax return for the tax year. These circumstances may also be declared by a separate written declaration.

Filing the declaration through the employer is a convenient way for parents to take advantage of tax deductions in advance, which leads to a decrease in the tax base and, accordingly, the income tax withheld by the employer during the tax year. The employer is responsible for the correct application of the tax deduction to the employee's income tax withheld.

Advance use of tax benefits for children - how is it declared?

In 2024, parents have the opportunity to take advantage of tax breaks for children in advance. This means that the tax base or tax that is deducted from the salary in real time can be reduced, instead of waiting for the end of the tax year.

How does the system work?The worker or employee may provide the employer with a written declaration confirming that he is eligible for the benefits and that the benefits will not be enjoyed by another employer or by the other parent. Thus, the monthly tax base for labor income is reduced by certain amounts depending on the number and status of children.

How is the annual settlement carried out?To January 31, 2025, the employer calculates the annual tax base, reduced by the amount of tax deductions, and determines the annual amount of tax. If there is an overpaid tax, the difference is reimbursed to the worker or employee.

What happens if the employer does not refund the overpaid tax?In such a case, individuals can benefit from the tax benefits by submitting an annual tax return under Art. 50 of the GDPR for 2024, even if they only have income from employment relationships.

Exceptions:It is important to note that persons who during the year were on maternity leave or received other non-taxable income, They cannot benefit from tax benefits, since they did not form taxable income and, accordingly, an annual tax base.

This option offers a flexible way for parents to take advantage of the tax benefits provided, which can lead to immediate financial relief during the year.

What are child benefits and how are they used in 2024?

In 2024, family allowances for children, known as child allowances, continue to play a key role in supporting families in Bulgaria. Certain changes and updates to the child allowance system have been announced to meet the needs of families and provide better support for raising children.

Amount of child allowance

Child benefit in 2024:The amounts of child allowance are kept at the same levels as the previous year. For one child, families will receive BGN 50, for two children - BGN 110, for three children - BGN 165, and for four children - BGN 175. For each subsequent child, the aid is increased by 20 leva. Child allowance for twins is kept at BGN 75 per child.

Income threshold

Income for child benefits:In 2024, the income threshold on which the right to receive child benefits depends is updated. The maximum income per person from the family for receiving child benefits is raised to 710 leva per month. This means that families with an income of up to BGN 710 per member will be entitled to the full amount of allowances. For families with an income between BGN 710.01 and BGN 810 per person, additional conditions are introduced, and they will receive 80% of the amount of the allowance.

Child allowance for children with disabilities

Child allowance for children with TELC:An important increase is noted in the child allowance for the care of disabled children. A child with a disability of more than 90% will receive 1180 BGN, a child with a disability of 70 to 90% - 570 BGN, and a child with a disability of 50 to 70% - 450 BGN per month. This increase aims to provide greater financial support for families raising children with more serious disabilities.

Allowance for raising a child up to 2 years of age

Allowance for children:The amount of the allowance for raising a child up to the age of 2 and for raising a child up to the age of 8 by the father or adoptive parent remains unchanged — BGN 780. Cash benefits in case of non-use of the additional paid leave for raising a child up to the age of 2 years are paid in the amount of BGN 390.

These allowances and benefits are part of the government's efforts to support families and provide better conditions for the upbringing and development of children in Bulgaria. The changes reflect the commitment to support families with children, while adapting to the economic environment and the needs of society.

One-time childbirth/maternity allowance 2024

In 2024, the amount of the one-time allowance for the birth of a child in Bulgaria was increased by 50%. This represents a significant support for families with newborn children, the amounts being as follows:

  • For the first child, the allowance is 375 leva.
  • For a second child, the amount increases to 900 leva.
  • For a third child, an allowance of 450 leva is provided.
  • For each subsequent child, families receive 300 BGN.

This assistance is provided to every family with a newborn child, regardless of income, which emphasizes the state's commitment to supporting young families.

In addition, in 2024, new regulations are introduced that allow mothers to transfer the right to maternity and maternity leave not only to the father, but also to the grandparents, if they are in an employment or employment relationship. This right also applies to adoptive mothers when adopting a child up to the age of 5. It is relevant to note that the grandparents to whom the leave has been transferred are entitled to a benefit from the National Insurance Institute (NOI) until the child reaches the age of 1, the amount of the benefit being 90% of their average social security income for the last 24 months.

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In addition to the above, maternity leave can also be enjoyed by the grandmother or grandfather after the child reaches the age of six months. This change is part of the budget extension law and the corresponding changes to the Labor Code, which emphasize the expansion of social support for families with young children.

One-time allowance for schoolchildren 2024

In the 2024/2025 school year, new measures are being introduced to support students and their families. One-off aid for schoolchildren, enrolled in the first, second, third, fourth and eighth grades, is set at 300 leva. This financial support is aimed at all students, regardless of whether their studies take place in a public, municipal or private school.

Parliament has decided to extend the scope of this aid to include pupils in primary education and those in eighth grade. Until last year, assistance was provided only to children in the first and eighth grades, but from the 2023-24 school year and for the next one, the amount remains 300 leva.

The payment of this aid takes place in two stages:

  • The first part (50% of the amount) is paid after the entry into force of the order granting the aid.
  • The second part is paid at the beginning of the second term, provided that the child continues to attend school.

The goalThe purpose of this aid is to make it financially easier for parents to purchase school supplies and clothing for their children, providing what is necessary for their successful education. Assistance is granted on the condition that the child lives permanently in the country and is not placed for upbringing outside the family. It is also available to students accommodated in families of relatives and relatives, foster families, as well as to a guardian or trustee.

As of January 1, they are also available monthly allowance of BGN 200 for raising a child up to one year, as well as allowances for children until the completion of secondary education, but not more than 20 years of age, when children are raised by their single adoptive parents.

Necessary documentsfor receiving a one-time allowance for schoolchildren include an application-declaration on a sample and a certificate from the relevant school that the child is enrolled as a student in the corresponding class. In certain cases, a medical protocol from the LCC or a copy of a certificate of appointment of a guardian or trustee may also be required.

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