The Assistance Law for Parents of children up to the age of three gives extra tax credits to children of this age, which decreases their tax payments. The law was published this week in the Official Gazette and went into effect retroactively from the beginning of the year. 

The additional tax credits for parents will apply retroactively from January 2024.

According to the law, starting from the 2024 tax year, both parents of children up to the age of 3 will receive an additional tax credit point in the following distribution:
~ For every child born in the tax year, one tax credit point was added for each parent
~ For every child over the age of one or two in the tax year, two tax credit points were added for each parent
~ For every child over the age of three in the tax year, one credit point was added for each parent.

This law will apply retroactively from the beginning of the tax year (1st January 2024). Self-employed people, and all others who are required to submit annual reports to the Income Tax Authority, will enjoy the benefit as part of the annual tax calculation after submitting their taxes. Employees who work in one workplace are not required to take any action in order to realize the benefit, their employers will calculate the additional credit points impartially.

In addition, the Tax Authority will act to proactively amend Tium Mas reports submitted during the year by those with more than one employer, so that parents who have submitted Tium Mas will receive the credit points without having to contact the Tax Authority in order to receive new tax benefits. The updated will be sent shortly.

This law also includes an addition to a work grant for low-income working parents of children up to age 3. Effective from 1st January, 2025 for the 2024 tax year. The amount of the supplement will gradually increase in the lower income ranges until it reaches a maximum of NIS 470 per month for each child up to the age of 3, and then gradually decline in the higher income ranges. The supplement will be given to parents whose average monthly income is within the qualifying income range, and who meet the other eligibility conditions set out in the Work Grant Law.

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