Income Tax Act Amendment Passed: Tax Exemption for Minor Children Increased to NT$151,500
Income Tax Act Amendment Passed: Tax Exemption for Minor Children Increased to NT$151,500
Taiwan’s Legislative Yuan passed amendments to the Income Tax Act on August 21, 2026, increasing the tax exemption for minor children and relaxing the deduction limit for certain social insurance premiums
Tax Exemption for Minor Children Increased by 50%
Under the amendments, taxpayers supporting minor children will be entitled to an exemption of NT$151,500 for each child, an increase of 50% from the current NT$101,000.
According to estimates by Taiwan’s Ministry of Finance, approximately 2.37 million people are expected to benefit from the measure, resulting in an estimated NT$8 billion in total tax reductions.
Taxpayers supporting children under the age of six may continue to claim both the exemption for minor children and the special deduction for preschool children.
Beginning with the 2026 tax year, taxpayers with children under the age of six may claim:
- First child: NT$150,000 special deduction for preschool children plus the NT$151,500 exemption, for a total deduction and exemption of NT$301,500.
- Second and subsequent children: NT$225,000 special deduction for preschool children plus the NT$151,500 exemption, for a total deduction and exemption of NT$376,500 for each child.
Social Insurance Premiums No Longer Subject to the NT$24,000 Itemized Deduction Limit
The amendments also modify the rules governing itemized deductions for insurance premiums.
Premiums paid for Labor Insurance, Farmers’ Health Insurance, National Pension Insurance, and insurance programs for military personnel, civil servants, and teachers are part of Taiwan’s social security system and, in many cases, participation is compulsory by law.
Following the amendments, these social insurance premiums will be treated similarly to National Health Insurance premiums and will no longer be subject to the existing annual itemized deduction limit of NT$24,000 per person for insurance premiums.
Accordingly, taxpayers who elect to use itemized deductions when filing their individual income tax returns may benefit from the revised treatment of qualifying social insurance premiums.
New Rules Apply to Income Tax Returns Filed in May 2027
Both the increased exemption for minor children and the revised itemized deduction rules for social insurance premiums will apply from January 1, 2026.
Taxpayers will therefore be able to apply the new rules when filing their 2026 individual income tax returns in May 2027.
The Ministry of Finance will also revise the relevant individual income tax return forms and undertake the necessary administrative and public information measures to implement the amendments.
Source: Taiwan Ministry of Finance, Press Release dated August 21, 2026
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