Having and raising children is expensive, with conservative estimates being around $200,000 to raise a child till age 18. Pregnancy-related costs go between $5,000 to $15,000, and it costs an estimated $13,640 a year to raise a child for the first four years.
To make it more affordable to have children, the government has implemented a slew of measures, one of which being tax reliefs or rebates for parents. These tax reliefs and rebates can only be claimed by parents who are Singapore tax residents, and claimed based on children who are Singapore citizens born within a marriage.
Read Also: [2023 Edition] Complete Guide to Baby Grants in Singapore – Baby Bonus; CDA; MediSave & Tax Relief
Determining The Child Order
The amount of tax relief or rebate depends on whether the child is the first, second or third (or subsequent) child. This is also known as the child order. You may check the IRAS website for more information on determining child order.
While a stillborn or deceased child may not qualify for parents to claim tax reliefs or rebates, they still count in terms of child order.
Read Also: From Birth To P1 Registration: Guide To Navigating Your Child’s Key Milestones
#1 Parenthood Tax Rebate
The Parenthood Tax Rebate (PTR) awards a one-off tax rebate of $5,000 for your first child, $10,000 for your second child, and $20,000 for your third and subsequent child.
Since this is a rebate, parents will receive credits which can be used to offset the income tax payable. Credits can be shared between parents, and unused credits can be rolled over to the next year of assessment until fully claimed.
Parents can still continue to share the credits even if they have divorced, and in the event of one parent’s demise, the surviving parent can still utilise the remaining credits.
While these credits can be apportioned to either parent, it makes no difference as to which parent claimed more (for married parents) since the impact is the same on household finances. However, for parents who are divorced, it probably makes sense to apportion the credits fairly based on the share of financial support and childcare duties that both parents undertake.
Read Also: Complete Singapore Parents’ Guide To Childcare Subsidies For Their Little One(s)
#2 Working Mother’s Child Relief (WMCR)
Source: IRAS
The WMCR qualifies a married, divorced or widowed working mother to claim for tax relief based on the table above. Children born before 1 Jan 2024 but only qualified for WMCR after 1 Jan 2024 (i.e. mother gets married to biological father, or child becomes citizen) will only qualify the mother to claim for income tax relief based on the column for children born after 1 Jan 2024.
In order to qualify, the child must be below 16 years old, or above 16 and studying full-time, and does not have an annual income (inclusive of allowances, bursaries or scholarships) exceeding $4,000 (increased to $8,000 from AY 2025).
Read Also: Complete Guide To Understanding The Working Mother’s Child Relief (WMCR) To Support Mums In The Workforce
#3 Grandparent Caregiver Relief
The Grandparent Caregiver Relief (GCR) can be claimed by a working mother who is married, divorced or widowed to receive $3,000 in tax relief.
GCR can be claimed on a caregiver who is either the mother’s parent or grandparent, or her spouse/ex-spouse’s parent or grandparent.
The caregiver must be residing in Singapore and looking after the child, who is either aged 12 or below, or handicapped and unmarried.
The caregiver must also not be earning an annual income exceeding $4,000 (raised to $8,000 in AY 2025).
Only one person can claim GCR for one caregiver and for one child, so two sisters, who are both mothers, cannot both claim GCR based on their mother. Additionally, one mother cannot claim GCR for both her parents based on the same child.
Read Also: Why The Government Is Expanding The Household Services Scheme (HSS) To Allow Foreign Domestic Workers To Perform Basic Child & Elder-Minding Services
#4 Qualifying Child Relief/Handicapped Child Relief
Qualifying Child Relief (QCR) and Handicapped Child Relief (HCR) qualifies parents for $4,000 (QCR) and $7,500 (HCR) tax relief respectively.
In order for parents to qualify for QCR/HCR, their children must fulfil the same criteria as for WMCR.
The QCR and HCR is shared between both parents, as compared to the WMCR which applies only to mothers and cannot be shared. Since this is the case, to optimise tax savings, it makes sense for both parents to compute their existing tax reliefs before deciding how to apportion the QCR/HCR. It makes sense to apportion the tax reliefs to the parent who has the highest taxable income after applying the other reliefs, since it would reduce the amount of taxable income in a higher tax bracket.
For example, in a single-child family, after applying other tax reliefs, the father has $80,000 in taxable income, and the mother has $90,000 in taxable income. Apportioning the $4,000 QCR to the father would only save $280 in payable tax, whereas it would save $460 in payable tax if apportioned to the mother.
With that in mind, do note there is a cap of $50,000 in tax reliefs that can be claimed per child, and a total of $80,000 in tax reliefs per person.
Read Also: Complete Guide To Personal Income Tax Rates And Income Brackets In Singapore
Single Unwed Mothers Are Not Eligible
Since the tax reliefs and rebates are structured to support married family units, single, unwed mothers are not eligible to claim these tax reliefs/rebates. However, as Minister for Finance Lawrence Wong pointed out, single, unwed mothers can claim the tax reliefs/rebates if they marry the biological father. They will be able to continue claiming the tax reliefs thereafter even in the event of a subsequent breakdown of the marriage.
Read Also: Complete Guide To Filing Your Personal Income Tax In 2024
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