Tax deductions for third-party child care are to be increased.
The federal government plans to increase the deduction for third-party childcare from CHF 10,100 to CHF 25,000 to improve employment incentives and strengthen the economy.
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The legislator wants to further reduce negative employment incentives in the tax system. Therefore, he plans to increase tax deductions for third-party child care at the federal level. Currently, deductions can be made up to a maximum of 10,100 Fr. Newly, it should be up to 25,000 Fr. However, the cantons are still left with their leeway.
Current legal situation
In the current system, a maximum of 10,100 Fr. can be deducted annually in direct federal tax, which was spent on external childcare. At the cantonal level, there are differences, as the cantons set the deductions themselves. Depending on the canton, these range from 3,000 to 20,400 Fr., with the canton of Uri allowing all proven costs to be deducted without an upper limit. Thus, if the care expenses of the parents exceed the upper limit of the deductions, a negative employment incentive exists. And the lower the upper limit, the greater it becomes. Particularly households in which both parents have a high level of employment are disadvantaged by the current situation. A low upper limit also further hinders an expansion of the employment rate of the parents.
Goals of the changes
To defuse this conflict situation between profession and family, the federal government now plans to raise the deduction for third-party child care to a maximum of 25,000 Fr. The amount of the deduction should continue to be independent of the parents' income. Parents who are still in education or are unable to work can also benefit from it. The decisive factor is only the proven costs for care. The cantons should continue to be able to retain their discretionary power. The federal government refrains from setting a minimum or maximum limit for cantonal deductions. In the short term, the federal government expects reduced revenue of 10 million francs, which, however, should be tax compensated in the long term. The proposal aims at an enhanced participation of qualified mothers in the labor market, which should contribute to reducing the shortage of skilled workers and strengthen the Swiss economy.
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