Family tax credits: spouse, children aged 21 to 29, parents living with you

When Laura, a nurse in Padua earning 36,000 €, filled in her Italian tax return on her own for the first time, she listed her unemployed husband and her nineteen-year-old daughter as dependants. The husband earned her a tax credit; the daughter did not. It was not a software bug: article 12 of the income tax code only grants the credit for children aged 21 to 29, unless they have a disability.

What the family tax credits are

Article 12 of the Italian consolidated income tax act grants a reduction of IRPEF to people who support certain relatives. It is neither a cash allowance nor a deduction from income: it is an amount taken off gross tax, once the brackets have already been applied to taxable income.

Under the text in force for 2026, three groups of relatives open a credit: a spouse who is not legally and actually separated, children within a precise age range, and ascendants, such as parents or grandparents, who live with the taxpayer. Other relatives, like brothers, sisters or in-laws, have no credit of their own.

The three credits share one feature: they shrink as the claimant's overall income grows. The legislator targets lower incomes through a ratio that falls with income until it reaches zero. Being able to compute that ratio, and to truncate it properly, is what this module is really about.

How gross tax is reached, with the brackets and the credit for employees, is covered in the ActioFin course on IRPEF and is not repeated here. We start where that course stops: gross tax is known, and the question is how much the family reduces it, month by month and person by person.

Who counts as a dependant

The first condition concerns the relative, not the taxpayer. Paragraph 2 of article 12 requires the person for whom the credit is claimed to have an overall income not above 2,840.51 euros. For children aged twenty-four or under, that ceiling rises to 4,000 euros.

The ceiling is measured before deductible charges, that is before removing any expenses the relative could deduct. It also counts pay received from international bodies and organisations, from diplomatic and consular missions, from the Holy See and from the entities it runs directly, which ordinary Italian income would otherwise leave out.

It is a hard limit, with no tapering. A 22-year-old who earns 3,900 euros from a summer job remains a dependant; the same child at 25, with the same income, no longer does, because the ceiling drops back to 2,840.51 euros. One euro above the threshold costs the whole credit for that person.

The ceiling looks at the relative's income, while the credit itself is counted in months, as we will see further on. Before filling in the return, then, gather each relative's income and the dates on which the family situation changed: those are the two pieces of information most often missing when you reach the dependants section.

The spouse credit

For a spouse, the credit depends on the claimant's overall income, divided into three bands. The first runs up to 15,000 euros, the second from above 15,000 up to 40,000 euros, the third from above 40,000 up to 80,000 euros. Above 80,000 euros there is no spouse credit at all.

• Income up to 15,000 euros: 800 euros minus 110 euros times the ratio of income to 15,000 euros
• Above 15,000 and up to 40,000 euros: a flat 690 euros
• Above 40,000 and up to 80,000 euros: 690 euros times the ratio of 80,000 euros minus income to 40,000 euros
• Above 80,000 euros: no spouse credit

The first band behaves in a surprising way. Its ratio has income on top, so it grows with income, and so does the amount taken off the 800 euros. At 15,000 euros the ratio equals one and the credit falls to 690 euros, exactly the second-band figure: the two bands join without any jump.

Paragraph 4 states that junction outright: when the first-band ratio equals one, the credit is 690 euros. The same paragraph adds that when the first-band or third-band ratio equals zero, no credit is due. In the third band that happens at exactly 80,000 euros of overall income.

In the third band the logic turns around. The numerator is the gap between income and the 80,000-euro ceiling, and it narrows as income rises. At 60,000 euros the ratio is 0.5 and the credit is half of 690 euros, namely 345 euros; at 79,000 euros only 17.25 euros are left.

The top-ups between 29,000 and 35,200 euros

Letter b) adds a small top-up to the spouse credit, reserved for a narrow slice of overall income. It works like a staircase with five steps: it climbs from 10 to 30 euros and then comes back down to 10 euros, disappearing entirely once income passes 35,200 euros.

The sums are small, but they show how much the boundaries matter. A taxpayer declaring 34,700 euros gets a 20-euro top-up, one declaring 34,701 gets 30. The ActioFin calculator applies the staircase with the exact limits of the text: the lower edge of each step is excluded and the upper edge included.

The top-up travels with the spouse credit and cannot exist without it: if the spouse is not a dependant, there is no top-up either. When the credit is scaled to part of the year, the calculator scales the top-up in the same way, month by month, so that the two figures stay consistent.

The credit for children aged 21 to 29

Letter c) grants 950 euros for each child aged 21 or over but under 30. It covers children born outside marriage and recognised, adopted, fostered or placed children, and the cohabiting children of a deceased spouse. From 30 onwards the credit remains only for a child with a certified disability.

For children under 21, article 12 now grants nothing: in their place the consolidated text shows passages removed by legislative decree no. 230 of 21 December 2021. The text we read does not say what replaced those passages: any support for younger children lies outside article 12 and outside this course.

Here too the full amount is only a starting point. The credit is due in the proportion given by 95,000 euros minus overall income, divided by 95,000 euros. With an income of 38,000 euros the ratio is 0.6: out of the 950 euros, 570 are due for each child.

With several children qualifying, the threshold rises for all of them: the 95,000 euros increase by 15,000 euros for every child after the first. Two children mean working on 110,000 euros, three on 125,000. Each child therefore carries a larger credit than it would on its own.

The ratio is truncated at the fourth decimal place, as paragraph 4 requires. The same paragraph covers an edge case: if the ratio for children or for ascendants is zero, negative or equal to one, no credit is due. It equals one only when overall income is nil, in which case there is no tax to reduce anyway.

Splitting the children credit between parents

As a rule the children credit is split 50 per cent between parents who are not legally and actually separated. The parents may however agree that it goes in full to the one with the higher overall income. Each of them computes the ratio on their own income, never on the couple's combined income.

Where one spouse is a tax dependant of the other, the children credit belongs in full to the supporting spouse. That is the classic single-income household: whoever claims the spouse as a dependant also claims one hundred per cent of the children credit, with no agreement needed.

After legal and actual separation, or the end of the marriage, the credit goes to the parent with custody unless they agree otherwise; with joint or shared custody it is split 50 per cent. If one parent cannot use it because their income is too low, it passes to the other, who must pay the matching sum back unless agreed.

A final rule concerns the lone parent. If the other parent is missing or has not recognised the children, and the taxpayer is unmarried or later separated, the first child may be treated with the spouse credit when that is more favourable. The ActioFin calculator does not handle this case and lists it among its assumptions.

The credit for ascendants living with you

Letter d) grants 750 euros for each ascendant, such as a parent or grandparent, who lives with the taxpayer. Living together is the condition: an elderly parent who stays in their own home, even if a son or daughter supports them financially, does not open this credit. The income ceiling of paragraph 2 still applies.

The credit tapers with the ratio of 80,000 euros minus overall income to 80,000 euros. On 40,000 euros of income the ratio is 0.5 and each ascendant is worth 375 euros; on 20,000 euros it is 0.75 and the amount rises to 562.50 euros. At 80,000 euros the credit runs out.

When several people are entitled for the same ascendant, for example two siblings who both live with their mother, the amount is shared pro rata between them. The text does not fix the shares: the calculator asks the user for the percentage that belongs to them and applies it to the result.

Months of dependency and exclusions

Family credits are scaled by month. They run from the month in which the conditions are met to the month in which they end, and the month of the event counts in full. Someone who marries in July has a dependent spouse for six months, July to December, and receives six twelfths of the yearly credit.

The same logic applies to a child who turns 21 during the year or to a parent who moves in with the taxpayer: the count starts in the month the condition is met. The calculator therefore asks separately for the months of dependency of the spouse, of the children and of the ascendants.

Two exclusions are worth knowing. Paragraph 2-bis denies the credits for relatives living abroad to taxpayers who are not citizens of Italy, of a European Union state or of a European Economic Area state. The Agenzia also states that non-residents, apart from the so-called Schumacker taxpayers, receive no family credits.

The overall income used in the ratios excludes whatever the taxpayer's main residence and its appurtenances produce, under paragraph 4-bis. A taxpayer who owns the home they live in leaves it out before computing the three credits, which is why the calculator asks for an income figure already cleaned of that item.

Family credits add up with the credits for the type of income and with those for expenses, and together they reduce gross tax only as far as its own amount. The second module shows what happens when the total exceeds the tax: the excess cannot be recovered in any form.

The rules described are those of the 2026 tax year, in version 32 of article 12 as read on the Gazzetta Ufficiale. The next version only records the repeal of the whole act by legislative decree no. 117 of 2026, effective 1 January 2027. This course does not guess at the rules that will replace it.