Let´s take a closer look at the Czech specific rules for claiming a tax allowance for a child who is about to complete its vocational preparation at a secondary school or to graduate from college or university.
The claim for a tax allowance for one’s children is stipulated in Sec. 35c of the Income Tax Act (Act No. 586/1992 Coll.), according to which the taxpayer (i.e., as a rule the parent) may claim a tax deduction for any child who shares a household with them and whose living expenses and needs are covered by them, as long as the child has not yet completed his or her 26th year of age, provided he or she is still enrolled in studies (i.e., is “continuously preparing for his or her future work life”), or else for the last time in that year in which the child completes his or her 18th year of age (if it no longer prepares for the future work life by attending school).
Completion of secondary school
When a child who is no longer a minor but has not yet completed his or her 26th year of age finishes his or her studies at a secondary school (academic high school, vocational college), the following scenarios may occur which have impact on whether the parent may claim a tax allowance:
1) The child has successfully completed its secondary-school tuition and is not going to college or university.
- The child continues to qualify as a student until the end of tuition within the given school year (i.e., until the end of June),
- and beyond that until the end of summer recess (July and August), provided however that they were neither in gainful employment nor entitled to unemployment benefits during the entire given calendar month.
2) The child fails the final exam on the regular examination dates (May, June).
- The tax benefits that may be drawn are the same as if the child had successfully graduated.
3) The child has successfully completed its secondary-school tuition, and goes on to study college/university in the same calendar year.
- In such a case, the entire time period between the graduation from secondary school and the enrollment in college qualifies as a time period of “continuous preparation for one’s future work life”. Because of this, tax benefits may be claimed irrespective of whether the child was during this period engaged in gainful employment or had a claim to unemployment benefits.
Matters are different if studies are being interrupted or abandoned early, or if the student is being expelled from school. In these cases, the child ceases to continuously prepare for his or her future work life as of the day on which, according to the school’s official communication, the studies were interrupted or the student is no longer enrolled.
Completion of college
Upon regularly completion of the child’s college studies, the allowance may be claimed for the last time for the calendar month following the month in which the studies ended – on the assumption that the child was not gainfully employed, nor drew unemployment benefits nor had a claim for subsidized retraining, throughout that entire month.
If the college graduate continues his or her education with another study program (at the same or at a different college or university), then the time period between the end of the first studies and the beginning of the second qualifies (for up to three months from the end of the first studies) as time spent on continuous preparation for one’s future work life, and thus the student’s parent is eligible for the tax allowance.
Conversely, an interruption of one’s college studies does not qualify as preparation for one’s future work life, and thus there exists no claim for the child allowance. The sole exception is an interruption of studies due to maternity leave or parental leave.
Income Tax Act (Act No. 586/1992)
Social Welfare Act (Act No. 117/1995)