Mar 2022 - Individual income tax reduction for parents of children under 3

Starting January 1, 2022, the individual taxable income of such parents can be reduced by a total of 1,000 yuan per month for each baby, said the circular. The employee who has a child under 3 could file the information in the IIT APP same as the other six additional special deductions. The deduction can be applied in full by one parent or can be split evenly, added the circular.

Foreign individuals meeting the conditions for resident individuals may choose to enjoy either additional special deductions for individual income tax or the preferential tax-exemption policies on allowances for housing subsidies, language training expenses and children's education expenses, etc. After making such choice, foreign individuals cannot make changes within a tax year. For those who enjoy the tax-free allowance policies, they cannot enjoy the benefit of this new deduction.

Here we enclosed the circular in Chinese for your sharing with your employees if needed:

为贯彻落实《中共中央 国务院关于优化生育政策促进人口长期均衡发展的决定》，依据《中华人民共和国个人所得税法》有关规定，国务院决定，设立3岁以下婴幼儿照护个人所得税专项附加扣除。现将有关事项通知如下：

一、纳税人照护3岁以下婴幼儿子女的相关支出，按照每个婴幼儿每月1000元的标准定额扣除。

二、父母可以选择由其中一方按扣除标准的100%扣除，也可以选择由双方分别按扣除标准的50%扣除，具体扣除方式在一个纳税年度内不能变更。

三、3岁以下婴幼儿照护个人所得税专项附加扣除涉及的保障措施和其他事项，参照《个人所得税专项附加扣除暂行办法》有关规定执行。

四、3岁以下婴幼儿照护个人所得税专项附加扣除自2022年1月1日起实施。