Switzerland’s parliament recently decided to increase the amount of childcare costs that can be deducted from taxable income.
Parliament voted 131 to 48, with 14 abstentions, to increase the maximum annual childcare deduction from CHF 10,100 per child to CHF 25,000 when calculating federal taxes, according to RTS.
Childcare in Switzerland is expensive. According to RTS, over a year, child care five days a week can cost CHF 32,000.
According to several parliamentarians, those with earnings too high to qualify for childcare subsidies are getting hit twice, once by missing out on the subsidies and a second time by paying high tax on the extra income earned. For some parents, the economics of going out to work do not stack up.
The plan, put forward by the Federal Council, is aimed at reducing the shortage of qualified professionals, a group in short supply and more likely to be affected by the combination of additional tax and childcare expenses eroding the economic incentive to work.
The deductions will apply to children under 14. The CHF 25,000 is a maximum. If actual costs are lower, only the actual costs can be deducted. The change applies to the calculation of federal income tax.