Single parents: here's how much you'll save with the 2028 tax reform

Higher single-parent tax credit, new early childhood deduction, unified tax class… The 2028 tax reform brings real benefits for solo parents in Luxembourg.

Raising children on your own in Luxembourg means juggling work, family life… and taxes. Good news: the 2028 tax reform has several concrete benefits in store for you.

Here's exactly how much you'll save.

What's changing for single parents

Currently, you're in tax class 1a, the class for taxpayers with dependent children who aren't married or in a civil partnership. The 2028 reform merges all three tax classes (1, 1a and 2) into one: Class U (for "unique").

This new class is based on the current class 1a. In practice, you keep your favourable tax treatment, plus several bonuses specifically for single-parent families.

The single-parent tax credit is going up

The single-parent tax credit (CIM) increases from €3,504 to €4,008 per year, that's €504 more in your pocket. It's automatic: if you have a dependent child and you're the only one claiming them, this credit applies directly to your tax bill.

How much will you save?

Here are the savings announced by the Ministry of Finance:

Annual income	Net savings	Tax reduction
€40,000	+€549/year	-41%
€50,000	+€567/year	-31%

Source: figures presented by Minister Gilles Roth when the bill was submitted, January 2026.

These figures take into account the new tax brackets and the higher single-parent credit. Worth noting: the lower your income, the bigger your percentage reduction. Depending on your exact situation (deductions, young children, etc.), the savings could be even higher.

New "early childhood" deduction: up to €5,400

If you have a child under 3, you'll benefit from a new deduction of €5,400 per year (€450/month). This is an entirely new measure designed to ease the financial burden of those first years.

For separated parents, this deduction is shared: each parent can deduct half (€2,700) if they have partial custody of the child.

Depending on your marginal tax rate, this deduction could mean up to €2,160 in real savings per year.

Other increased deduction limits that apply to you

The reform also raises several deduction ceilings:

Deduction	Before	After
Childcare & domestic help	€5,400	€6,000
Insurance & interest	€672	€900
Home savings (ages 18-40)	€1,344	€1,500

A real-life example

Marie, 35, French cross-border worker, one 2-year-old child, earning €50,000/year

With the 2028 reform, Marie benefits from:

• Savings from new tax brackets + single-parent credit: +€67/year (official figure)
• New early childhood deduction (€5,400): up to +€1,500/year depending on her marginal rate
• Higher childcare deduction ceiling: potentially +€240/year if she claims the maximum

Potential total: over €2,000 in annual savings.

When do these measures take effect?

The tax reform comes into force on 1 January 2028. You'll benefit for the first time when filing your 2028 tax return in 2029.

In the meantime, make sure you're optimising your current tax situation: private pension contributions, deductible insurance, childcare costs…

Cross-border workers: this applies to you too

If you live in France, Belgium or Germany and work in Luxembourg, these benefits apply to you as well, provided you meet the tax assimilation criteria (90% of your income taxable in Luxembourg, or less than €13,000 in foreign income).