Income-related combination discount 2020

With a child who is younger than 12 years old at the end of 2019 and in particular on January 1, 2020, you are entitled to the income-related combination discount in 2020, called the iack 2020 or child tax credit. Another requirement for this tax credit from the Tax Authorities is that you have an income from work in 2020 or are entitled to the self-employed deduction. This tax refund can amount to more than 2,880 euros if you are younger than 66 years and four months (AOW age 2020) and depends on the level of your income from work. With the income-related combination discount, the Tax Authorities help you to pay your child’s living costs. You can calculate your iack discount yourself here. If you have a partner, the combination discount may be considerably lower in 2020 because this tax credit is transferrable to a lesser extent.

The iack 2020

  • Entitlement to the income-related tax credit 2020, requirements and conditions
  • Amount of the income-related combination discount 2020, iack 2020
  • The maximum amounts of the income-related combination discount 2020
  • Transferability of tax credits
  • How to apply for the income-related combination discount?
  • Questions about the income-related combination discount
  • Conclusion iack 2020

Entitlement to the income-related tax credit 2020, requirements and conditions

Under the following conditions, you are entitled to the income-related tax credit in 2020 and you can therefore apply for it:

  • In 2020, a child who was younger than 12 years old on December 31, 2019, has lived with you for at least six months. You can be a single parent or the lowest-earning partner;
  • Living with you means that the child is registered with you at your home address in the GBA. It does not have to be your own child as long as you provide for the child’s subsistence;
  • You have income from work in 2020 or are entitled to the self-employed deduction;
  • Your income from work, current employment, is higher than 5,072;
  • If you have a partner, an additional requirement is that you as an applicant earn less than your partner. If you have a partner, it must also be considered to what extent the tax credit is transferable.

Amount of the income-related combination discount 2020, iack 2020

With the income-related combination discount, if you meet the conditions you are entitled to a minimum of 1,502 and a maximum of 2,881 if you do not yet have a state pension. The maximum amounts are lower if you are entitled to AOW:

The maximum amounts of the income-related combination discount 2020

 

In 2020 you are younger than 66 years plus four months

You are entitled to state pension

iack, maximum amount

2,881 euros

1,502 euros

These amounts are determined as follows: You are younger than 66 plus four months in 2020:

Income more than

Income less than

Income-related combination discount

5,072

nil

5,072

30,233

11.45% x (labor income – 5,072)

30,233

and more

2,881

Income-related combination discount 2020, from 66 years and four months

Income more than

Income less than

Income-related combination discount

5,072

nil

5,072

30,233

5.963% x (labor income – 5,072)

30,233

and more

1,502

This way you can easily calculate approximately how much income-related combination discount you are entitled to. Calculation example calculation of income-related combination credit Suppose you are 25 years old and have a labor income of 20,000 euros, then your tax credit is a maximum of 11.45% of 14,928, or 1,709 euros. But pay attention to the word maximum, this amount can be a lot lower if you have a partner. This is in connection with the transferability of tax credits.

Transferability of tax credits

If you are not single but have a partner with an income, you apply for the tax credit if you have the lowest income. Until 2019, this tax credit was always paid to you if your partner had sufficient income. This has changed as of 2019. If you are dependent on your partner’s income for the payment of the combination discount in 2020, a maximum of 100% of the amount will not be paid out, but 20%. This percentage will be further reduced to zero in 2023.

How to apply for the income-related combination discount?

You apply for the 2020 tax credit from the Tax Authorities via the provisional income tax assessment 2020 (end of 2019) or the 2020 income tax return (spring 2021). In fact, if you do not file an income tax return and therefore do not submit an application, you will not receive the tax credit.

Questions about the income-related combination discount

Two questions about this tax credit: 1. Do I receive the income-related combination credit if my second child is older than 12 years old? If you meet the conditions for your first child and a second child is older than 12 years old at the end of 2019, you will receive the tax credit in 2020. 2. Will I receive the income-related combination discount if my youngest child turns over 12 years old in 2020? For this tax credit, the age of the child as of December 31, 2019 is taken into account. If your child has a birthday in 2020 and therefore turns 12 for the first time, you are entitled to the tax credit in 2020. but not anymore in 2021.

Conclusion iack 2020

If you meet the conditions, it is worthwhile to apply for the income-related tax credit from the tax authorities. You do this with a provisional income tax assessment or via your income tax return. Do not leave this money unused at the tax authorities.

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  • Earn tax-free in 2019, 2020 and 2021
  • Entitlement to the income-related combination discount