According to the Hungarian government’s announcement, from October 2025, mothers with three children could also be exempt from personal income tax for the rest of their lives (this is already possible for mothers with at least four children since 2020), and the exemption would be phased in for mothers with two children.
The Hungarian Minister of National Economy announced that the introduction of the personal income tax exemption for mothers of at least two children will start in 2026 and will be fully integrated into the tax system in 4 years.
According to the plans, on 1 January 2026, mothers of two children under 40 will become exempt from personal income tax. From 2027, mothers of two children who are between 40 and 50 years old will become exempt from personal income tax. From 2028, mothers of two children who are between 50 and 60 years old will become exempt from personal income tax and from 2029, the exemption will be extended to those who are 60 years old and over. Based on the announcement of the Hungarian Minister of National Economy the lifetime personal income tax exemption for mothers of two and three children will operate in a similar way as the system already in place for mothers of four children. This allowance will be available to all working mothers, regardless of their salary, age or the age of their children. A new addition is that no personal income tax will be deducted from the infant care allowance and childcare allowance.
Following the announcement, speculation broke out in many circles as to whether the tax exemption would apply to all types of income subject to personal income tax. Later, it was clarified that the personal income tax exemption for mothers of two and three children will apply to their wages. This is of particular importance since it means that dividend income and exchange gains and other capital gains are not subject to this exemption from personal income tax.
On 24 March 2025, a proposal to extend the personal income tax allowance for mothers under 30 was also submitted to Parliament. Mothers under 30 are already entitled to personal income tax allowances under the existing legislation, which will be further extended. The personal income tax allowance now would cover wages, benefits and certain income from independent activities, such as self-employment. The changes would enter into force on 1 January 2026, but the allowance would not apply automatically, and would be subject to a declaration with the appropriate content in the tax statement.
By Gabriella Galik, Founding Partner, KCG Partners Law Firm
