Families with a newborn are entitled to parental leave allowance (Elterngeld) to compensate for loss of earnings – at least partially. The allowance covers a minimum amount of 300 EUR/month and can rise up to a maximum of 1.800 EUR/month – depending on the preceding income situation. Such allowance will be assessed for 12 months plus 2 additional months if both parents are sharing their time with the newborn for at least 2 months. Additional allowance might be assessed in case of siblings or multiple births.
PLEASE NOTE: Parental allowance will be assessed retroactively for 3 months only starting with the date the application has been filed with the authority. For that reason such application should be filed rather soon. In terms of taxes such parental allowance is tax free but has to be declared anyway. Therefore, it is very likely that an obligation to file a tax return does exist!