China exempts childcare subsidies from personal income tax

(ECNS) -- China on Wednesday announced that the childcare subsidies will be exempted from individual income tax in order to encourage childbirth.

In an announcement jointly released by China's Ministry of Finance and State Taxation Administration (STA), the exemption will be applied retroactively from January 1 of this year.

According to the announcement, health authorities will collaborate with finance and tax departments to establish an information-sharing mechanism. County-level health departments will handle personal income tax exemption procedures for eligible applicants.

Starting January 1, 2025, all families with children under age 3 — whether first, second, or third child — will receive an annual subsidy of 3,600 yuan (about $500). For infants or kids born before 2025 who are still under 3, the subsidy will be prorated based on remaining eligible months.

(By Zhang Dongfang)