Co-parenting and the income dependent combination rebate

Wednesday, July 5th, 2017 by

Income dependent combination rebate

 

The income dependent combination rebate, the so called “Inkomensafhankelijke Combinatiekorting”, is one of the personal levy rebates in the income tax, which reduces the amount of income tax due. This specific personal levy rebate is interesting for you when:

 

  • you have a child and your child is under the age of 12 years on January 1st;
  • your child is registered at your address for at least 6 months during that year;
  • your income from employment is at least € 4,881 (year 2016) / € 4,895 (year 2017) or you are entitled to the self-employed deduction;
  • you are a single parent and you work or you have a tax partner, you both work and you earn less than your partner.

 

The income dependent combination rebate is € 2,769, if your income is more than € 32,969. If your income is less than € 32,969, but more than € 4,881, the income dependent combination rebate is € 1,039 + € 6,159 % x (your income – € 4,881) (year 2016).

 

The income dependent combination rebate is € 2,778, if your income is more than € 33,065. If your income is less than € 33,065, but more than € 4,895, the income dependent combination rebate is € 1,043 + € 6,159 % x (your income – € 4,895) (year 2017).

 

In general, the income dependent combination rebate can only be claimed by one parent and not both.

 

The main rule

 

The income dependent combination rebate can be claimed if you meet the requirements mentioned above. One of the requirements is that the child is registered at your address during that year for a period of at least 6 months.

 

Problem with co-parenting

 

A child can only be registered at one address at City Hall (municipality). When separation or divorce occurs, the parents may decide to raise the child together even when they are not living together, the so called co-parenting. The problem with co-parenting in relation with the income dependent combination rebate is that one of the parents does not meet the registration requirement. Only the parent who lives at the same address as the child is entitled to this personal levy rebate. Who is it going to be?

 

combination rebate

Solution

 

Due to the previous described problem, a specific rule (exception) for co parents became part of our Dutch tax law. This specific rule ensures that both co parents can take the income dependent combination rebate into account, if the child stays at least 3 days (whole day) per week with both parents.

 

Two co parents went a while ago to court with a related case and the court decided on June 14, 2016 in Gelderland in their advantage. Their child was living the first week with their father and the second week with the mother, the third week with the father etc. Relevant is that the child is living equally (50/50) or almost equal with both parents.

 

Orange Tax Services

 

If you need any help with writing a letter of objection due to the fact that the income dependent combination rebate is incorrectly not taken into account, please feel free to contact us.

 

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