Raising children in Singapore is predicted to cost between $200,000 to $1 million for each child until they are adults. Fortunately, there are parenthood benefits such as tax reliefs and rebates that we can claim to ease the expenses for citizens. This is also in addition to the Child Development Account (CDA) and the Baby Bonus cash gift for babies in Singapore.
The filing of personal income tax deadline is on 15 April annually, so make sure to claim your tax reliefs and rebates and stretch your savings as parents and taxpayers. Wondering how much family tax benefits you can enjoy and how to claim the Parenthood Tax Rebate as Singapore Citizens, read on to find out!
What tax reliefs and rebates can parents claim for in Singapore?
- Parenthood Tax Rebate (PTR)
The Parenthood Tax Rebate (PTR) is offered to parents in Singapore who are tax residents. This includes Singapore citizens, Singapore Permanent Resident (SPR) or foreigners who meet the qualifying criteria. To be eligible for the PTR, parents should be married, divorced, or widowed in the relevant year. If both spouses are tax residents, you can share the Parenthood Tax Rebate for each qualifying child to offset your respective income tax payable. Any unutilised Parenthood Tax Rebate can be used to offset your income tax payable in subsequent years until the tax rebate is fully claimed.
How much tax deductions can you get by claiming this rebate? It’s $5,000 for the first child, $10,000 for the second child and $20,000 for the third child onwards.
- Qualifying Child Relief (QCR)/Handicapped Child Relief (HCR)
This child relief gives a fixed claimable amount for every kid. Parents can claim the Qualifying Child Relief for each child under 16 years old. Like the PTR, you may share the QCR/HCR on the same child with your spouse/ex-spouse based on an agreed apportionment. Eligibility includes your adopted kids and stepchildren too.
How much savings? Parents can deduct $4,000 per child under the Qualifying Child Relief (QCR) during tax filing, or $7,500 per child under the Handicapped Child Relief (HCR). Mums can claim up to $50,000 in combination with the Working Mother’s Child Relief (WMCR).
- Working Mother’s Child Relief (WMCR)
For working mums who are Singapore tax residents and have children who are Singapore Citizens, you are entitled to claiming for the Working Mother’s Child Relief (WMCR). This tax relief is deductible for married, divorced and widowed working mothers. Like the QCR and HCR, you can get the tax deductions if you’re caring for your adopted kids and stepchildren too.
How much additional tax relief can working mums claim for? 15% of your earned income for your first child, 20%for the second child, and 25% per child for the third and subsequent child, with a maximum cap at 100% of your earned income. Mums can claim up to $50,000 in combination with the Qualifying Child Relief (QCR)/Handicapped Child Relief (HCR).
- Foreign Domestic Worker Levy Relief (FDWL)
The FDWL Relief is extended to encourage married women to continue working even after having children. Married women and divorcees/widows with school going children may claim relief for the Foreign Domestic Worker Levy paid in the previous year. Singaporean mums, PRs and expats are eligible to claim for the Foreign Domestic Worker Levy Relief. Men are not qualified for this claim at all.
How much can you claim? You may claim twice the total foreign domestic worker levy paid in the previous year on one foreign domestic worker. Subsequent foreign workers hired will not be part of this relief eligibility.
- Grandparent Caregiver Relief (GCR)
If you are a working parent with parents helping to care for their children (aged 12 or younger), you are entitled to claim the Grandparent Caregiver relief during your income tax filing too. Your child must be a Singapore Citizen; while your parent, grandparent, parent-in-law or grandparent-in-law (including that of ex-spouse) who is caring for your children must not be working.
How much will you save? You may claim $3,000 on your parent, grandparent, parent-in-law, or grandparent-in-law. Do note that the GCR on that caregiver can only be claimed once. E.g. If your sister has already claimed GCR on your mother, you’ll not be able to do so. However, you may check if you qualify for the Parent Relief instead.
With the tax filing season coming up, are you unsure how to claim these extra rebates for families and parents? I’m a mother and Financial Consultant raising my family in Singapore too. I understand how challenging it may be to understand the different conditions to enjoy these parenthood perks. If you need advice on these financial matters, I’m just a phone call or text away to share my knowledge and experience to journey with you beyond finance.
Note: All information outlined in this article is accurate as of Jan 2021.