A parent may lose personal income tax relief if their child earns too much

Tax deductions, PIT exemptions for families with four or more children, and joint tax returns – these are all things a parent can lose if their child earns too much. According to the Ministry of Finance, the income limit for 2025 is PLN 22,546.92.

"If a child exceeds this limit by even a single złoty, the parent will lose these benefits," says Barbara Otrzonsek, a tax advisor and manager at ATA Tax. She emphasizes that the summer holidays are a good time to boost student income, but parents need to be aware of the consequences.

PIT exemption for young people

Let's start by reminding you that income from employment and commissions earned before the age of 26 is exempt from personal income tax. This is also the case with graduate internships, student internships, and maternity benefits. The annual exemption limit is PLN 85,528.

– But be careful, even if the son or daughter’s salary falls within the income limit and is exempt from personal income tax, the parent will lose the right to preferences if the child has exceeded the income limit (i.e. income less costs) – warns Barbara Otrzonsek.

Child tax relief, i.e. tax deduction

What benefits can be lost? Primarily, the child tax credit . This involves deducting a specific amount from tax. The deduction is available to parents raising children:

• minors – regardless of their annual income,

• adults who receive care allowance (supplement) or social pension – their income is also irrelevant,

• adults (up to 25 years of age) who are studying and do not exceed the above-mentioned annual income limit.

Taxpayers who file their taxes according to the tax scale benefit from this relief. For their first and second child, they can deduct PLN 1,112.04 from their PIT annually (PLN 92.67 per month). For their third child, it's PLN 2,000.04 (PLN 166.67 per month), and for their fourth and subsequent children, it's PLN 2,700 (PLN 225 per month).

PIT exemption for families of 4 plus and joint settlement with a child

If a child exceeds the income limit, parents may also lose their right to the personal income tax exemption introduced by the Polish Deal. This exemption applies to taxpayers with four or more children. They do not pay personal income tax on income up to PLN 85,528 per year. The exemption applies to income from employment, business activity (also taxed at a flat rate or a lump sum), contracts of mandate, and maternity benefits. It is also available (similar to the tax deduction) to parents with adult children (up to 25 years of age) still in school. "However, it is enough for one child to exceed the income limit and the parents lose their right to this preference," warns Barbara Otrzonsek.

Another privilege is the right to file a joint tax return with a single parent. This can result in significant tax savings, but if your son or daughter (those under 25 and still in school) exceeds the income limit, the preference is lost.

How to calculate a child's income?

Barbara Otrzonsek points out that when calculating the children's earnings threshold, we include not only the most common income, such as from summer assignments, but also from the sale of shares or virtual currency. "We also add income from so-called other sources, such as the occasional sale of graphics online. However, we don't include survivor's pensions," the expert points out. She emphasizes that the calculation is not at all easy; for example, with a contract for specific work, we consider income, and with a contract for work that is subject to the youth exemption, we consider revenue. "All of this means that it's easy to lose the right to preferences without even realizing it," summarizes Barbara Otrzonsek.

Is there a chance the earnings threshold could be eliminated? This was asked of the Minister of Finance in Parliamentary Question No. 8617. "We are not working to change the current rules," the Minister replied. He recalled that for many years, the limit was only PLN 3,089. However, the Polish Deal changed the rules for calculating it, significantly raising it and increasing it annually (in 2024, it was PLN 21,371.52, and in 2025, it is PLN 22,546.92).