Parliament passes law doubling IRS deduction for third and subsequent children from 2028, with 50% rise for 2027
On 28 October parliament gave final approval to a law that increases the IRS (Portuguese income tax) deduction for families with three or more children. The deduction for each child from the third onwards will be double the current amount. The new amounts will apply in full from the 2028 tax year. For 2027, a transitional year, the deduction for these children will rise by 50%.
Families will first see the benefit in 2028, when they file their return for 2027: either a bigger refund or a smaller tax bill. The child deduction is taken off the tax itself, not off taxable income. To qualify, the child must be listed on the return as a dependant (dependente) and must have their own NIF (tax identification number).
The law still has to be signed by the president, after which it will be published in the Diário da República, the official gazette.
The proposal was put forward by the CDS-PP party, and the final text was drafted by parliament's budget committee. Only the Communist Party (PCP) and the Left Bloc (BE) voted against.
Parliament also passed a second law, proposed by the Socialists: the Garantia para a Infância top-up paid to families on very low incomes will rise in line with the increases to the child deduction. Only the PSD and CDS-PP voted against.
