Spouse tax credit – are you entitled to it?

The spouse’s allowance is a specific tax benefit that only certain spouses can claim under the Income Tax Act. It is available to married couples and people in civil partnerships provided that the union lasted for all or at least part of the calendar year. However, there are many more conditions. Let’s look at the spouse discount (and others) in more detail.

For simplicity’s sake, we won’t list all the variations of the allowance, but we’ll stick with the term ‘spouse’s allowance’, although you can also claim it for a spouse, civil partner or registered civil partner.

Under what conditions can the spouse discount be claimed?

If you are planning to take the deduction for your spouse or civil partner, there are a number of conditions you must meet together:

• Your marriage or civil partnership lasted for all or at least part of the year for which you are claiming the spouse’s allowance.
• Your spouse’s (or registered partner’s) income did not exceed £68,000 for all 12 months in that year.
• From 2024, the conditions for claiming tax relief for a dependent spouse/partner have been tightened by requiring the dependent spouse to care for a child under the age of three in the same household.

If you don’t meet any of these conditions, then you are not entitled to claim the spouse’s allowance.

What counts towards the wife’s annual income?

The annual limit of CZK 68,000 includes gross salary and remuneration from a work performance agreement or a work activity agreement, income from business, rental income, social insurance pensions (old-age and disability), sick pay, maternity pay, unemployment benefits or gifts received and, for example, profit-sharing payments.

However, you do not have to include parental allowance, material hardship and care allowances, scholarships, state contributions to pensions or building societies, tax refunds or social assistance and care benefits within this limit.

The annual limit is always calculated for the entire previous calendar year, i.e. from 1 January to 31 December.

What is the amount of tax relief for my wife?

The basic amount of the spouse allowance is currently CZK 24,840 per year. However, if the spouse (or any of the others listed above) is a holder of a disabled person’s PIC/P card, she will receive double this amount, namely CZK 49,680.

The spouse’s allowance does not entitle you to a tax bonus, as is the case for example with the child allowance (child tax credit).

Applying the spouse’s allowance: What will you need?

To claim the spouse’s allowance (and others), you will need the following documents:

1. An affidavit from the spouse in which the spouse confirms that their income does not exceed CZK 68,000.
2. Employer’s certificate or other proof of income.
3. A copy of the marriage certificate (if this is the first time the allowance is claimed).
4. Document confirming that the spouse is caring for a child under 3 years of age.

Please note that if you are a disabled person with a disabled person’s card, you must also produce this card to claim the discount.

What must the spouse discount affidavit contain?

The wife’s affidavit for the wife’s deduction does not have a specific prescribed format. However, the following information must always be clearly stated:

• Identifying information for both spouses (name, social security number, address).
• A statement that the spouse’s income has not exceeded the limit.
• Date and signature.

For example, you can word the wife’s affidavit as follows:

I, Jana Nováková, born on 1 January 1990, residing at Novákova 1, 110 01 Prague, hereby declare on oath that my income for the calendar year 2024 did not exceed CZK 68 000. This is evidenced by the attached documents.

Please sign the declaration.

How to claim the wife’s discount?

The deduction for the wife (and others) is claimed for employees through the employer using the “pink form”(Income Taxpayer’s Declaration ). That is, once a year when dealing with taxes.

Self-employed individuals include the spouse tax credit on their tax return. Again, they must attach an affidavit of the wife’s allowance and other documents to the return. However, if a self-employed person files for a so-called flat-rate tax, then he or she cannot take any tax deductions or allowances (for example, the child allowance), so neither can the wife allowance.

What if the child was born during the year?

The allowance is assessed on a month-by-month basis – 1/12 of the allowance can be claimed for each month at the start of which the conditions are met (i.e. the child is already born and under 3 years old and the other spouse meets the income limit). If the child is born during the month, the spouse’s allowance for that particular month does not apply and only kicks in from the following month.

Married couples wishing to claim the spouse’s allowance often have to deal with the situation that the dependent child was born during the year for which they wish to claim the allowance. As the annual limit of CZK 68,000 includes the wages in the year as well as the maternity allowance, it is necessary to calculate whether the wife’s income has actually exceeded CZK 68,000 for all 12 calendar months. Due to the level of wages, the income is usually higher, so this discount is usually not applicable in the first year of the child’s birth.

Summary

The spouse’s allowance is a useful tax relief that can help reduce the family tax burden. Married couples or civil partners are entitled to this relief if they meet a number of conditions, for example that the other spouse’s income does not exceed £68,000 per year and (from 2024) the dependent spouse is caring for a child under 3.

The amount of the discount is CZK 24,840 per year, or CZK 49,680 for holders of a disabled person’s card/P. However, if you use the flat-rate tax, the discount cannot be claimed for your wife.