Child Tax Allowance 2026 – ELStAM Entry and the Comparison Test

Updated: May 2026. In Germany the child tax allowance (Kinderfreibetrag) stands at €6,828 per child per year in 2026, plus the BEA allowance of €2,928 for care, upbringing, and training needs — €9,756 per child in total. As part of your income tax return, the Finanzamt (tax office) automatically checks whether Kindergeld (the €3,108/year child benefit) or the allowance is more favorable. The entry in ELStAM concerns only the child-counter function for the solidarity surcharge and church tax.

Legal basis: §§ 31, 32 and 38b EStG

The child tax allowance sits at the intersection of three central provisions of the Income Tax Act (Einkommensteuergesetz, EStG):

• § 31 EStG governs the relationship between Kindergeld and the child tax allowance and mandates the comparison test.
• § 32 (6) EStG sets the specific amount of the child tax allowance and the BEA allowance. For 2026: €3,414 per parent as the subsistence minimum plus €1,464 per parent as the BEA allowance.
• § 38b (2) EStG defines the child-counter procedure in ELStAM for the monthly consideration of the solidarity surcharge and church tax.

On top of this comes the ELStAM procedure (Elektronische Lohnsteuerabzugsmerkmale, the electronic wage-tax deduction features), which, based on the Finance Ministry circular of 7 August 2013 and its updates, governs the data exchange between the registration authority, the tax office, and the employer.

An important clarification: the child tax allowance does not lower wage tax

Unlike the single-parent relief amount, the child tax allowance does not reduce the monthly wage tax deduction. The reason: Kindergeld (€259/child in 2026) is paid out every month. Only within the income tax return is it checked whether the allowance would have yielded a higher tax saving than the Kindergeld actually paid. If so, the tax office grants the difference as a tax refund.

The allowance does, however, take effect in the monthly wage deduction for two secondary taxes: the solidarity surcharge (5.5%, in 2026 only above high incomes) and church tax (8% or 9% depending on the federal state).

The comparison test step by step

The tax office weighs two amounts against each other:

1. Kindergeld amount: €259/month × 12 = €3,108 per child per year
2. Tax saving from the allowance: marginal tax rate × €9,756 per child

If the tax saving exceeds €3,108, the tax office grants a tax refund in the amount of the difference, in addition to the Kindergeld already paid.

For jointly assessed married couples, the threshold doubles, since the tariff is more favorable under splitting. Rule of thumb for 2026: the allowance beats Kindergeld from around €70,000 in taxable income for married couples, and from around €38,000 for those assessed individually.

Three case studies with concrete calculations

Case 1: the Demir family – middle income, one child

The Demir couple from Stuttgart, two children (aged 4 and 7), joint taxable income €78,000.

• Kindergeld already paid: 2 × €3,108 = €6,216
• Full allowance: 2 × €9,756 = €19,512
• Tax without the allowance: €12,916
• Tax with the allowance: €6,420
• Tax saving from the allowance: €6,496
• Since €6,496 > €6,216 → the allowance is more favorable
• Tax refund: €6,496 − €6,216 = €280

In addition, the Demirs save the solidarity surcharge (the allowance takes full effect here in 2026) and church tax of around €530.

Case 2: the Hoffmann family – top earner, three children

Mr. Hoffmann is the sole earner, three children (aged 3, 8, 12), gross annual €140,000, taxable income €115,000 (jointly assessed with a non-earning wife).

• Kindergeld paid: 3 × €3,108 = €9,324
• Full allowance: 3 × €9,756 = €29,268
• Tax saving from the allowance: around €12,290
• Refund: €12,290 − €9,324 = €2,966

Plus a church tax saving of around €1,105 → a total value of over €4,000/year.

Case 3: the Wagner family – separated, half the allowance

Ms. Wagner is a single parent with a son (aged 10), taxable income €55,000. The father pays maintenance but lives in his own household.

• Half the child tax allowance: €4,878
• Tax saving at a marginal rate of 34%: €1,658
• Half the Kindergeld for offset: €1,554
• Difference in favor of the allowance: €104

Ms. Wagner can additionally apply for the full allowance if the father meets less than 75% of his maintenance obligation (transfer under § 32 (6) sentence 6 EStG). In that case the saving doubles to around €3,316.

The child counter in ELStAM: what is entered and how?

ELStAM stores a so-called child-allowance counter for each parent (a value of 0.5 for one parent, 1.0 when both parents' shares are united on one). This counter does not control wage tax, but it does affect:

• The solidarity surcharge: reduces the assessment base by the child tax allowance.
• Church tax: reduces the assessment base analogously.

Automatic entry via the birth notification

The child counter is entered automatically when:

1. The birth is registered at the civil registry office.
2. The registration office transmits the data to the Federal Central Tax Office.
3. The Federal Central Tax Office assigns the child's tax ID and creates the parent-child link.

For married parents, a counter of 0.5 each is entered on both tax IDs. For single parents, or when transferring the half allowance, the application for a child counter of 1.0 must be filed manually at the tax office — via the form Application for Wage Tax Reduction, section on children.

Manual correction needed in these cases

• adoption after birth
• acknowledgment of paternity after birth
• transfer of the half allowance to one parent (separation, the other parent's refusal of maintenance)
• foster-child relationship
• relocation of residence abroad

Comparison: Kindergeld vs. child tax allowance by income tier

With two or more children, the thresholds shift downward, because the splitting tariff works progressively in the family's favor.

What happens if... – special cases

...the child turns 18? The entitlement continues until the 25th birthday, provided the child is in training or studying. The ELStAM entry stays automatically in place as long as Kindergeld continues.

...I get married? For a single parent with their own child, marriage means that both spouses receive a counter of 0.5 each, provided the new spouse lives in the household as a step-parent.

...my child studies abroad? Within the EU/EEA, the full entitlement remains. For third countries, the allowance is reduced according to country groups 1–4 (the allowance for children abroad).

...the other parent pays no maintenance? A transfer of the full child tax allowance to the parent providing care is possible if the maintenance-obligated parent meets less than 75% of their obligation.

...the child has its own income? For adult children in training, there is no longer an income limit (abolished in 2012). Kindergeld and the allowance remain in place even with side jobs, as long as the training is the main activity.

Common mistakes

Mistake 1: not filing a tax return. Without a tax return, no comparison test takes place. Anyone with a high income who only receives Kindergeld often forfeits several thousand euros a year.

Mistake 2: not correcting the child counter in ELStAM. After adoption or acknowledgment of paternity, the counter is not adjusted automatically. The result: too high a solidarity surcharge and too much church tax in the monthly wage deduction.

Mistake 3: filling in the child annex incompletely. For a birth mid-year or at the start of training, all periods and training certificates must be stated without gaps.

Mistake 4: forgetting the transfer application when maintenance is refused. Anyone who can apply for the full allowance due to the ex-partner's inadequate maintenance must declare this actively in the main form.

Related calculations

For your individual comparison test, use the interactive comparison at Kindergeld vs. child tax allowance. If you also want to check your entitlement to the single-parent relief amount, you will find the full calculation logic there. For the monthly payout of Kindergeld, the Kindergeld calculator remains the central tool.

Comparison: what was different in 2025?

In 2025 the child tax allowance per child was €6,672 plus the BEA allowance of €2,928, together €9,600. For 2026 the child tax allowance was raised to €6,828 — the BEA share stays unchanged at €2,928. Per child, that is now €9,756 of allowance, an increase of €156 over the previous year.

The entry in ELStAM has not changed procedurally. Important: anyone who already had a child tax allowance entered in 2025 need not reapply — the update of the amount happens automatically at the Federal Central Tax Office. The factor in the tax-class combination IV/IV also stays unchanged. For children newly born in 2026, by contrast, an application for wage tax reduction at the tax office is needed so that the allowance takes effect within the year in the payslip — otherwise it only applies via the following year's assessment.

Practical note: adjustment after separation

If a couple separates during the year, the child tax allowance is usually split in half — a counter of 0.5 per parent in ELStAM. If only one parent wants to receive the full allowance, a joint written transfer declaration is necessary, submitted to the tax office. Without this declaration, the half rule remains in place — which, with very different parental incomes, is often not optimal.

Next steps

• Compare individually with the tool Kindergeld vs. child tax allowance.
• After a separation, check the entitlement to the half relief amount.
• On the interaction with maintenance, read our article on adjusted net income.
• Submit outstanding tax returns for 2022 to 2025 — the four-year deadline applies.