On 5 April 2017, the Federal Council opened the consultation procedure on the tax treatment of third childcare costs. According to this, third-childcare costs should be more tax-deductible. In the case of direct federal tax, a maximum of CHF 25,000 should be allowed for deduction, while the cantons are obliged to grant a deduction of at least CHF 10,000.
According to a press release issued by the Federal Council on 5 April 2015, the consultation procedure will be launched as part of the Federal Council's Specialist Initiative (FKI) with the aim of reducing negative incentives to work in the tax system. The consultation draft is intended to counteract the domestic shortage of skilled workers and to improve the compatibility of work and family life by taking better account of the costs of third-party childcare for tax purposes.
In the case of direct federal tax, parents should be able to deduct the costs of third-party care for their children from their income up to a maximum of CHF 25,000 per child. In the case of direct cantonal and communal taxes, cantonal law should set an upper limit for the deduction that is not less than CHF 10,000 per child.
Under the current law, the proven costs of third-party care for a child can be deducted annually for direct federal tax purposes up to a maximum amount of CHF 10,100 per child(Art. 33 para. 3 DBG). At the cantonal level, the deduction amounts to between CHF 3,000 and CHF 19,200 per child, depending on the canton. In the canton of Uri, all proven costs for childcare can currently be deducted (without limit).
The deduction of childcare costs for third parties should continue to take the form of an inorganic deduction both for direct federal tax and for cantonal and municipal taxes. As before, the deduction for childcare for third parties will not only apply to employed persons, but will also be open to persons in education and disabled persons. The other eligibility criteria are also to remain unchanged.
Together with the media release of 5 April 2017, the draft of the Federal Act on the Tax Consideration of Childcare Costs and the explanatory report on the consultation procedure for the tax consideration of childcare costs were published.
In addition to the other general consultation documents, an overview of the currently applicable deductions for third-party childcare costs at the federal and cantonal level was also published.
