Spouse tax allowance

What it means

The spouse allowance is an amount by which a taxpayer may reduce their tax base if their spouse lives in the same household and has no income of their own or only a low one. It is one of the tax-free allowances under the income tax act.

The entitlement arises only if during the year the spouse, for example, cared for a child under three, was registered as a jobseeker, has a disability or cared for a close relative with a severe disability. The mere fact that the spouse does not work is not enough.

The amount is derived from the subsistence minimum and reduced by the spouse’s own income. For higher-earning taxpayers the amount tapers down to zero. If the conditions were met for only a few months, a proportional part for those months applies.

How it works in practice

The spouse allowance is not applied in monthly withholding but only after the year ends. An employee claims it in the annual tax reconciliation; a sole trader or employee with other income claims it in the type B tax return or the type A return.

We ask clients for details of the spouse: personal number, the number of months in which the conditions were met and the amount of their own income. Some benefits count towards that income while others, such as parental allowance or child benefit, do not. Where in doubt we check the specific benefit.

We combine the spouse allowance with other reliefs, such as the child tax credit. For families where both partners worked part of the year, we compare which of them should claim the reliefs so that the result is best for the household.

What to watch out for

A common mistake is claiming for the whole year although the spouse started working in the autumn, for example. The allowance applies only to months in which the conditions were met, while the spouse’s own income is counted for the whole year. A wrong claim means additional tax and interest.

Spouses cannot both claim the allowance for each other for the same period, and it is not available for a spouse with whom the taxpayer does not share a household. If the tax office challenges the claim, it will ask for evidence of registration, childcare or disability.