From 2026, half a million mothers in Hungary will be exempt from personal income tax, with this number increasing to one million by 2029. This follows the Hungarian Parliament’s approval on 29 April 2025, of an allowance for mothers raising two or three children.
The extension of personal income tax exemption aims to promote social recognition of family formation and child-rearing. The allowance for mothers raising two or three children is not regulated in the Hungarian Personal Income Tax Act, but will be introduced through a new piece of legislation. However, its structure follows the same principles as existing personal income tax base allowances, particularly the tax exemption for mothers with four or more children. This change aligns with a series of family-friendly tax reforms set to take effect soon, including the gradual increase of family tax allowance, personal income tax exemption during maternity (for csed and gyed) and the extension of personal income tax exemption for mothers under 30.
Who is eligible for the allowance?
Mothers raising two or three children are eligible for the allowance if they
- are entitled to family allowance as biological or adoptive parents in respect of the children they are raising, or
- are no longer entitled to family allowance but have been eligible for at least 12 years.
Accordingly, the allowance cannot be claimed for unborn children.
What types of income are covered?
The allowance for mothers raising two or three children generally applies to income from employment, commission, self-employment and similar sources. It does not apply to income from property rental or capital gains.
The good news is that any portion of the allowance that cannot be deducted from the personal income tax base may be taken into account as a family contribution allowance.
If eligibility applies for less than the full tax year, the allowance must be applied on a pro rata basis.
What are the conditions?
The allowance can be claimed by the mother through a declaration in her tax return.
When can allowance for mothers raising two or three children be claimed?
The allowance can be claimed at different times.
The allowance for mothers raising two children will be introduced in four phases:
- from 1 January 2026, for mothers who have not yet reached the age of 40;
- from 1 January 2027, for mothers who have not yet reached the age of 50;
- from 1 January 2028, for mothers who have not yet reached the age of 60;
- from 1 January 2029, a lifetime personal income tax exemption will apply to mothers of two children, regardless of age.
Thus, in 2026, mothers with two children under 40 will be entitled to claim the allowance on some of their income forming part of the consolidated tax base and on their wages earned (accounted) after 31 December 2025.
The allowance for mothers with three children can be claimed for income earned after 30 September 2025, and, in the case of income from employment, for wages accounted for after that date.
The allowance for mothers raising two or three children will have a broad impact on both employers and employees. If you have any questions regarding eligibility or the claiming process for these new benefits, please feel free to contact us!
This article provides general information and does not constitute advice.
