The allowance for the care and upbringing or education of children is a tax allowance. Your income is not taxed to the amount of the tax-free allowance. In the course of the income tax assessment, the competent tax office checks whether the tax saving from the child allowance and the allowance for care and upbringing or training is higher than the entitlement to child benefit.
The tax-free allowance for care and upbringing or training amounts to 1,464 euros. For spouses who are jointly assessed for income tax, the tax-free allowance doubles to 2,928 euros.
The tax-free amount is divided equally between the parents (principle of halving). If the parents live separately and a minor child only lives with one parent, the latter can apply (to the tax office) to have half of the tax-free amount of the other parent transferred to him or her.
If you do not meet the deduction requirements during the entire year, the tax-free amount is divided into two and taken into account on a pro rata basis.
An entry in the electronic wage tax deduction features and thus the consideration in your monthly wage statement is only made under the same conditions as for the child allowance.