Parenthood Tax Rebate Working Mother Child Relief, Qualifying Child Relief – these are all great ways to lighten the financial burden of raising a family in Singapore. But, it can get quite confusing keeping track of the child reliefs available to you. This is where this guide comes in, to simplify some of the more essential child reliefs in Singapore!
Given that raising a child in Singapore can cost anywhere between $200k – $900k, any way to save some money will go a long way. Since all of us have to pay taxes, why not take advantage of the Parenthood Tax Rebate or other tax reliefs catered for parents?
You can get up to $20k in tax relief just from the Parenthood Tax Rebate alone, which is no small amount. So let’s get into it!
Quick Guide To Parenthood Tax Rebate In Singapore
The Parenthood Tax Rebate (PTR) is easily the most available tax rebate for most parents in Singapore. The PTR was implemented to encourage families to have more children and also to lighten the financial burden of raising a larger family in Singapore.
Take note that the PTR is not a tax deduction – but a rebate. Meaning, this will help to offset your income tax payable.
Amount of rebate:
1st child: $5,000
2nd child: $10,000
3rd/subsequent child: $20,000
If your child was born before 1 Jan 2008, you will not qualify for the 1st child rebate nor the rebate from the 5th child onwards. If your 1st child was born between 2004-2007, unfortunately you will not qualify for the 1st child rebate either.
For parents’ eligibility:
Singapore citizens or permanent residents (PR) who are married/widowed/divorced – and with children of course
Foreigners who have stayed/worked in Singapore for more than 183 days are also eligible.
The Parenthood Tax Rebate can be split between both parents too.
Plus, your child also needs to be a Singapore Citizen at the time of birth, or within 12 months thereafter.
How to claim the Parenthood Tax Rebate:
When your income tax is due this year, simply log into myTax Portal via IRAS at https://mytax.iras.gov.sg/ and under ‘Individuals’ click on ‘File Income Tax Return’
After that, click on ‘Deductions, Reliefs and Parenthood Tax Rebate’ and click on ‘Parenthood Tax Rebate (For NEW Claims Only)’.
Other Tax Reliefs For Parents
There are many a number of other child tax reliefs that parents in Singapore can claim – but take not that these may change in 2022. Meaning, when you’re due for income tax in 2022, the rebates and tax reliefs may be very different from what’s listed below.
However, it’s still good for you to be aware of them so that you can better plan for your family’s finances in the year ahead.
Qualifying Child Relief (QCR)
Claim of $4,000 in tax relief per child that’s studying full-time, below 16 and has an annual income of less than $4,000.
Handicapped Child Relief (HCR)
Claim of $7,500 in tax relief per mentally or physically handicapped child. No age or income requirements. Does not stack with QCR.
Working Mother Child Relief (WCMR)
The WCMR was created to encourage women to remain in the workforce even after having children. As the name implies, this is only applicable for females. The tax relief is as follows:
1st Child: 15% of mother’s earned income
2nd Child: 20% of mother’s earned income
3rd Child & beyond: 25% of mother’s earned income
The total amount of tax relief that can be claimed from QCR/HCR + WCMR is $50,000.
How The Child Reliefs & Tax Rebates ‘Stack’
Knowing about the various tax reliefs and rebates are one thing, but knowing how they come together to offset your income tax is something most parents aren’t sure about.
Of course, a reminder again that these may change in 2022.
- First, your chargeable income needs to be calculated.
- This is calculated using your employment income, and then taking into account the QCR/HCR, WCMR and other reliefs such as CPF relief.
- This will give you your chargeable income. At this point, the Parenthood Tax Rebate (PTR) can be accounted for, to give you your net tax payable.
Are There Other Tax Reliefs?
Yes! There are others such as the Foreign Domestic Levy Relief and Grandparent Caregiver Relief, which we will cover in another article. After all, these tax rebates and reliefs are subject to change in the coming year. Your best resource would be to check on IRAS, or on madeforfamilies.gov.sg But, keep these in mind so that when you’re due for taxes at least you’ll know what kind of tax relief you’re entitled to.
Raising a child in Singapore is no doubt expensive, these rebates and tax reliefs definitely help a lot!