Section 20 (1)(b) of the Income Tax Act, Chapter 81:01, allows for an annual deductible child allowance of one hundred and twenty thousand dollars ($120,000) for each child under the age of eighteen years old. This allowance must not exceed ten thousand dollars ($10,000) monthly per child and will be apportioned according to the individual’s earning period.
Only one person will be entitled to claim for child allowance
Definitions:
“person” includes a mother, father, stepmother or step-father, adoptive parents, guardian and any person who has treated a child as a child of the family.
“child” includes a step-child, or child adopted by law or a child of the family within the meaning of the Family and Dependants Provision Act;
An employee who is eligible for a deduction in respect of a child will be required to fill out the Claim for Deduction in Respect of Child Form and submit the completed form to their employer so that the employer can grant the deduction from their salary.
The employer will be required to make the necessary adjustment to the employee’s salary based on the declaration made in the Claim for Deduction in respect of Child Form.
No deduction shall be granted by the employer to the employee in respect of the child in the absence of the declaration in the Claim for Deduction in Respect of Child form.
Frequently Asked Questions
No, the information is submitted once. Where the employee has given birth or may have adopted a child then an additional form with the new details and a copy of the birth certificate must be submitted.
The Guyana Revenue Authority does not require the employers to collect proof of relationship. However, the employee is required to submit the birth certificate of the child they are making the child declaration claim for.
By signing the declaration, it is assumed that the employee has already reached an agreement with the other legal guardians regarding relinquishing rights since only one person can claim for the child.
The employer shall grant the retroactive allowances in the next payroll month, until all deductions are allowed.
The applicant should enter both numbers in the two boxes provided at the bottom left hand side of the document the certificate number and the Division/ Center number.
The employee should be granted the child allowance of $10,000.
The child allowance must be apportioned based on the employee period worked, that is commencing from the month of employment.
In such cases where the child is born mid-month the allowance should still be granted to the qualified individual based on their earning period.
The child allowance is not granted on the basis of where the child was born. Once the individual claiming the allowance pays taxes in Guyana, the allowance will be granted where the criteria are satisfied.
An expatriate parent can claim child allowance providing that they are paying taxes in Guyana. However, the child must also be residing in Guyana for the allowance to be granted.
The child needs to be residing in Guyana for the parent to claim for the allowance.
Section 20 of the Income Tax Act, Chapter 81:01 provides for the allowance to be apportioned monthly.
An individual whose income is below the statutory threshold will not be eligible to receive the child allowance.
The law provides for a mother, father, step mother or stepfather, adoptive parents, guardian or any person who has treated a child as a child of the family to claim child allowance.
The person claiming the child allowance must be earning an income in Guyana to claim for the deduction.
The child allowance is deducted after determining an individual total taxable income.
The child allowance should be prorated up to the month when the child attains the age of eighteen (18).
