The Polish Deal: Single parents may again account for income tax jointly with their child

by Maria Wośkowiak

29 June 2022

Starting from 1 July 2022 single parents will again be able to account for income tax jointly with their child.

The relief will be in force on the same principles as before the Polish Deal. The President signed the amended PIT Act on 13 June 2022.

Relief for single parents

At the beginning of the year, the preferential rules of accounting for the relief for single parents were abolished under the Polish Deal. Until the end of 2021, single parents could disclose in their annual tax return the tax calculated as twice the amount of the tax calculated on half of their taxable income. These rules were in force for nearly 30 years, until 2022 when the relief was abolished and replaced with an allowance for a child of a single parent in the amount of 1,500 zloty.

The lawmakers argued that if the relief for single parents was left in force on the principles applicable in 2021 and was combined with the 30 thousand zloty of tax-free amount, it would favour single parents over married couples, which could lead to an increased number of divorces.

Due to many protests and the parents’ disapproval of the new solutions, the government eventually decided to abolish the new relief and reinstate the old rules. The Senate modified the draft statute so as not to favour single parents and single parents will be allowed to disclose the tax calculated as twice the amount of the tax calculated on half of their taxable income, regardless of whether the child is healthy or disabled.

Principles in force from July 2022

Starting from July 2022, the principles which were in force until the end of 2021 will be reinstated. Single parents will be allowed to calculate tax as twice the amount of the tax calculated on half of their taxable income. At the same time, this change means that single parents accounting for tax jointly with their child will be able to enjoy a double tax-free amount. This is, undoubtedly, a favourable solution.

Changes in the relief for a child of a single parent

The above changes entail other modifications which are going to be introduced by the amended PIT Act from July 2022. Pursuant to the regulations, family pension of minor children will not be added to parent’s income. This change will allow the child to enjoy a separate tax-free amount.

Furthermore, the threshold of the income of an adult child who is a student is also going to change. The amended act will increase child’s income without forfeiting tax preferences of the parents from 3,089 zloty to 16,061.28 zloty in 2022.

If you would like to know more about changes following from the Polish Deal, you are welcome to contact our experts.