In 2025, families with children could benefit from a significant tax reduction. This proposal, announced by the Minister of Economy Giancarlo Giorgetti and supported by Prime Minister Meloni, is part of the context of the next Budget Law. The main objective is to encourage the birth rate in Italy by easing the tax burden for those
with dependent children.
In this guide, we explore how this proposal would work, who it’s for, and what are the possible tax advantages for families.
Table of Contents:
What does the Tax Reduction Proposal provide
The Government’s proposal provides for a reduction in taxes for families with children starting from 2025. The intent is to address the problem of low birth rate, easing the tax burden and offering greater economic incentives
to families.
The plan involves an increase in existing tax deductions for families with dependent children, rather than a direct reduction in tax rates. The total cost of the intervention is estimated at between 5 and 6 billion euros, and is part of the measures that will be included in the 2025 Budget Law
.
How Tax Cuts Work for Families with Children
The mechanism behind the proposal is based on increasing tax deductions. Tax deductions are amounts that taxpayers can subtract from the amount of taxes due. Increasing these limits would allow families with children to reduce the amount on which they pay taxes, thus generating tax savings
.
On the other hand, for families without children, deductions could be reduced, leading to a different fiscal balance between the various categories of taxpayers. However, there would not be a change in tax rates, but only a change in the deduction criteria
.
Tax Deductions That Could Increase
Tax deductions that could be increased for families with children starting in 2025 include:
- Deductions for dependent children: already existing, they could be increased to ensure greater economic support.
- Deduction for health expenses: families could get more tax breaks for medical expenses.
- Deduction for university expenses: for those who have children who attend university.
- Deduction for sports activities: useful for those who bear expenses for their children’s sports activities.
- Deductions for school expenses: applicable for families who incur expenses related to the education of their children.
- Deduction for public transport expenses: could be increased to support the cost of transportation for children.
- Deduction for daycare expenses: for those with young children who attend kindergarten.
Currently, these expenses are already deductible, but the intention is to raise existing limits to allow more substantial tax savings than currently expected.
Income Limits to Access the Tax Reduction
One of the points still under discussion is whether income limits will be placed to access these benefits. Some sources suggest that the tax reduction could be applied regardless of income, making the measure accessible to all families with children, regardless of their economic situation.
However, it will be necessary to wait for more details to know if household income requirements will be introduced.
When Will the Tax Reduction Take Effect
The tax reduction for families with children should take effect from January 1, 2025, if the proposal is approved under the 2025 Budget Law. The text of the law must be submitted by October 2024 and approved by Parliament by 31 December 2024.
The legislative process is still in its preliminary phase, and it will be necessary to find financial coverage to support the intervention. We will update on the progress of the proposal as news emerges
.
Other Bonuses and Aid for Families
In addition to the tax reduction for families with children, there are already numerous grants and bonuses dedicated to parents, which could also be confirmed in 2025. These include the kindergarten bonus, the baby bonus and the single allowance for dependent children. All these measures are accompanied by the tax discounts provided for families and could be renewed next year
.
The proposal to reduce taxes for families with children in 2025 represents an important step towards supporting birth and parenting in Italy. However, its implementation will depend on the approval of the Budget Law and the availability of the necessary financial resources
.
