Revised Labor Ministry Policy: Alteration of NDPL for Certain Working Parents to Implement 6% Adjustment
Yo, here's the scoop on the upcoming family tax benefit in Russia, starting from 2026!
People working with two or more munchkins and an average income under 1.5 times the poverty line are gonna have their income tax all adjusted like a DJ mixing tracks, with the excess handed back to them. This move is gonna help out 'bout 4.2 million families, housing around 10 million kiddos, as pointed out by Anton Kotyakov.
In the current situation, parents with a small fam of two or more kids and a normal income get hit with a 13% income tax rate, but to claim the family tax bonus, they gotta submit an application through "Gosuslugi", MFC, or the Russian Social Fund between June 1 and October 1 of the year following the reporting year (courtesy of Deputy Alexei Govyrin). The benefit doesn't renew automatically and needs an annual confirmation. Also, bonus points if you're an adoptive or foster parent.
As for what's changing in 2026, families with two or more kids need to have a per-person income that doesn't exceed 1.5 times the local poverty level, and they gotta make sure their alimony obligations are squared away. If they clear all that, they can enjoy a 6% tax rate, earning 7% back on their income tax payments from the previous year (as there's a 1% difference from the standard rate). Plus, the government’s gonna look at the family's property assets (like their house and cars) when deciding their eligibility for this juicy tax break.
Before we get all excited about this new policy, it's essential to remember the good ol' days when there were partial tax exemptions and lump-sum payments, but they were nothing compared to the support these families are gonna get in 2026. With this upcoming family tax payment system, they're gonna get not only a handy break on their income tax bills but also even better support from their employers.
Stay tuned for more updates, and for all things families and taxes in Russia, hit up our Telegram channel @expert_mag!
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Additional Enrichment Insights:
- Detailed Eligibility Criteria:
- Families are only eligible if their kids are under 18 or younger than 23 and still in education.
- Families must not have any outstanding alimony payments.
- The government will consider the family's property security, including housing and vehicles, when determining their eligibility.
- Comparison to Current System:
- Before the new system, families received various tax exemptions and lump-sum payments, such as those given for childbirth, but these were less robust compared to the new family tax payment system.
- Improved Employer Assistance:
- The Russian Ministry of Finance is working on modifications to increase tax-free lump-sum payments for employers who support parents during their child's first year after birth or adoption, potentially going up to 1 million rubles per kid[2].
- Goals and Objectives:
- The tax relief, alongside employer assistance, aims at lessening the financial burden on families with multiple children.
- The upcoming family tax benefit in Russia, slated for 2026, will offer tax adjustments for families with two or more children and an average income under 1.5 times the poverty line, benefiting approximately 4.2 million families and over 10 million children.
- In the current system, parents with two or more children and normal income submit applications through "Gosuslugi", MFC, or the Russian Social Fund to claim the family tax benefit, but the new policy in 2026 will feature an automatic renewal and a lower 6% tax rate, offering families a 7% return on their income tax payments from the previous year.
- Adoptive or foster parents are bonus points in the new policy, with the government taking into account the family's property assets, such as their house and cars, when deciding their eligibility for this tax break.
- Compared to the old system that offered partial tax exemptions and lump-sum payments, families in 2026 will enjoy not only a reduction in their income tax bills but also better support from their employers, thanks to potential changes in tax-free lump-sum payments for employers who aid parents during their child's first year after birth or adoption.
- To stay updated on policy-and-legislation developments regarding families and taxes in Russia, follow the Telegram channel @expert_mag, which covers current general-news on business, finance, and politics.
