The Spanish child tax allowance

The short answer

Every child who lives with you and does not earn too much adds an amount to the personal and family allowance, which is the part of your income Spanish income tax does not tax¹. The amounts rise with birth order and carry an increment of their own if the child is under three.

What decides whether you keep it is not one condition but two, and they are not the same. One looks at what your child earns. The other looks at what your child declares.

What each child adds

The 2,800 euro increment of article 58.2 is added for each child under three, whatever their order¹. In adoption or foster cases it applies regardless of the child's age, in the year of entry in the civil register and the two following years.

These figures have not moved since 1 January 2015. Article 58 has six versions in the consolidated BOE text and the last one came into force on that date¹.

The two income limits, which are not the same

This is the point that costs money every year, and it is split across two articles.

Article 58.1 requires the child to have no "annual income, excluding exempt income, above 8,000 euros"¹. That is the entitlement limit: above it the child generates no allowance, even if they live at home and are twenty.

Rule 2 of article 61 says something else: the allowance does not apply "when the ascendants or descendants generating the entitlement file a return under this tax with income above 1,800 euros"². That limit is four times lower and is triggered by a different event, which is filing the return.

The concrete case is always the same. A student works over the summer, tax is withheld on their pay, and they file a return to get it back. If what they declare exceeds 1,800 euros, their parents lose the allowance for them. On a second child that is 2,700 euros of allowance gone, and what that is worth in tax usually exceeds the refund the child was going to collect.

Note the subject of the rule. It speaks of "the descendants generating the entitlement", so the loss falls on the child who files and not on their siblings.

It is split 50/50 between those entitled

Rule 1 of article 61 splits the allowance for descendants equally when two or more taxpayers are entitled in respect of the same child². Two parents filing separately apply 1,200 euros each for a first child, not 2,400 each.

The same rule adds a wrinkle for cases with different degrees of kinship: the allowance goes to those of the closest degree, unless they have no annual income above 8,000 euros, in which case it passes to the next degree. That is the rule that lets grandparents apply the allowance for a grandchild when the parents fall below that figure.

What is never split is the taxpayer's own allowance under article 57, which is 5,550 euros and is yours in full¹.

A child is not worth more because you earn more

This is the part almost no page covers, and it changes the answer.

The allowance is not deducted from the taxable base. Article 63.1.2 applies the scale to the whole general taxable base and then reduces the tax "by the amount resulting from applying the scale in point 1 above to the part of the general taxable base corresponding to the personal and family allowance"³. Because a scale is walked from the bottom, what is taken off always comes out of the lowest brackets.

The 2,400 euros of a first child are relieved at the 9.50 per cent of the first state bracket in both cases³. Deducting them from the base would have been worth 360 euros on a 25,000 base and 540 on a 90,000 one, so the deduction mental model overstates the saving precisely for the highest earners. On top of that figure comes whatever the regional half takes off, worked out the same way with your region's scale.

Who counts as a child

Article 58.1 asks three things at once: that the descendant is under twenty-five or has a disability at any age, that they live with the taxpayer, and that they stay under the income limit¹.

On living together, the same paragraph is wider than it looks. It puts people linked to the taxpayer by guardianship and foster care on the same footing as descendants, under the terms of the applicable civil law. And it treats the descendant's dependence on the taxpayer as living together, except where the maintenance-payment regime of articles 64 and 75 applies.

On age and dates, rule 3 of article 61 governs: personal and family circumstances are determined "according to the situation existing on the tax accrual date"², which is 31 December. A child born on 30 December gives the whole year's allowance, under-three increment included.

The exception is rule 4, and it runs the other way. If the descendant dies during the year, the amount is 2,400 euros². It is a flat figure with no birth order and without the article 58.2 increment, so a third child who would have added 4,000 euros adds 2,400.

A worked example with real numbers

A couple filing separately have two children and neither is under three. Each parent applies the 5,550 euro taxpayer allowance and half of the 5,100 the two children add, that is 2,550, giving a personal and family allowance of 8,100 euros each.

On a general taxable base of 30,000 euros, those 8,100 euros take 769.50 euros off the state half of the tax, that is the 9.50 per cent of the first bracket, while the marginal rate on that base is 15 per cent³. If their region has used the article 46.1.a margin to raise the amounts by 10 per cent, the regional allowance rises to 8,910 euros and those 810 euros of difference are worth around 77 euros more⁴. Nine of the fifteen common-regime regions have used it (Andalusia, Asturias, the Balearic Islands, the Canary Islands, Castilla y León, Catalonia, Galicia, Madrid and La Rioja), and the remaining six stay on the state amounts⁶.

If the second child filed their own return with 1,900 euros of income, the allowance for them would disappear for both parents under rule 2 of article 61², and each parent's allowance would fall from 8,100 to 6,750 euros.

What this page does not calculate

The child allowance is one piece of the return, not the return. Regional deductions for large families or for a birth are not here: they are letter c of that same article 46 of Law 22/2009 and move considerably more money than the 10 per cent margin⁴. Nor is the 1,200 euro annual maternity deduction, which is not an allowance but a credit against the tax and has its own page. And the savings scale, which appears when the allowance overflows the general base under article 56.2, lives on the capital gains pages⁵.