Increase in the maximum deduction:

The Federal Council has decided that the maximum deduction for external childcare costs will be raised from the previous CHF 10,100 to CHF 25,000 per child per year. This adjustment will take effect in 2023 and follows a legislative amendment passed by parliament in the autumn session.

Conditions for the deduction:

To claim this increased deduction, certain conditions must be met:

• The child must be under 14 years old.
• The child must live with the taxpayer.
• The childcare costs must be directly related to the work or education of the mother or father.

Objectives of the legislative amendment:

The increase in the tax deduction aims to improve the compatibility of work and family life, particularly by promoting the integration of well-educated women into the labor market. This measure is an important step to financially support families and encourage employment.

Political development:

Interestingly, an earlier proposal with similar goals was rejected in a referendum in September 2020. Observers attribute the rejection to the fact that, in addition to increasing the tax deduction for externally cared-for children, the proposal also included an increase in the general child deduction. In the second attempt, parliament dropped this additional increase, leading to the adoption of the new regulation.

Conclusion:

This legislative change represents a significant innovation in the Swiss tax system and provides substantial financial support for families. It is important for parents to take this change into account in their tax planning to fully benefit from the increased deduction options.