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Poland Just Passed a Zero-Income Tax Law for Parents: What Americans Should Know
Poland has signed into law a major tax break that eliminates personal income tax for parents raising at least two children, a policy aimed at supporting families and tackling one of the country’s biggest demographic challenges.
Under the new legislation, families with two or more children who earn up to 140,000 zloty (about €32,900 or roughly $38,000 USD) a year will pay zero personal income tax — a significant reduction in tax burden and one of the boldest family-focused tax cuts in Europe in 2025–2026.
Here’s what this law means, why Poland enacted it, and what U.S. families and tax professionals abroad should understand about similar family tax policies.
What the New Law Actually Does
Signed by Polish President Karol Nawrocki in mid-October 2025, the law officially removes the requirement that eligible parents pay personal income tax (sometimes called PIT) on their earnings if they:
Are raising two or more dependent children, and
Earn up to 140,000 zloty per year.
Before this change, all Polish taxpayers were subject to personal income tax, even families with children, though child-related tax credits and benefits existed on a smaller scale. Due to the new law:
A two-child family earning below the threshold may pay no income tax at all;
Both parents can qualify separately — meaning a couple could collectively shelter up to 280,000 zloty of income if each parent earns up to 140,000 zloty.
President Nawrocki and other supporters frame this as direct financial support for families that helps parents keep more of their earnings. It also aligns with broader policies in other European countries that use tax relief and cash benefits to support families in the face of low birth rates.
Who Qualifies? The Criteria Explained
This tax exemption applies to:
Biological parents and legal guardians with two or more dependent children, and
Foster parents caring for two or more children.
Children are generally defined as dependents up to age 18, or up to age 25 if they are still in full-time education. That broader definition is designed to help families with older children in school, similar to many child-tax benefit systems around the world.
Why Poland Enacted the Law: Demographics and Family Support
Poland’s birth rate has been among the lowest in the world, leading policymakers to look for ways to support families and encourage higher fertility. Reports noted that average births in Poland had fallen to historic lows in recent years, a trend shared by several European countries facing aging populations and declining workforce numbers.
President Nawrocki said the policy is designed to:
Support household finances
Boost disposable income for working parents
Help counter population decline by making family life more affordable
In announcing the tax cut earlier in 2025, Nawrocki said, “Financial resources must be found for Polish families... The personal income tax exemption for parents of two or more children is not only my promise but an obligation.”
What It Means for Families (and the Economy)
For qualifying families, this is substantial tax relief, potentially saving thousands of zloty a year compared to current PIT rates, which can range from 12% to 32%.
Early estimates (based on local reporting) suggest the average qualifying family could keep roughly 1,000 zloty more per month due to the exemption, a material boost in take-home income. This is a significant amount for the lower-income families who will benefit from the new legislation.
Supporters argue this could lead to:
Increased consumer spending
Lower financial stress for parents
Greater incentives to have and raise more children
Critics of similar policies in other countries, however, sometimes point out potential downsides — such as reduced tax revenue or questions about fairness to families without two children. But the initial reception among young working families in Poland has been largely positive, reflecting widespread cost-of-living pressures across Europe and beyond.
How Poland’s Policy Compares Internationally
Poland’s zero-income tax move for parents with two or more children is distinctive — but it’s not without precedent globally. Several countries and regions use targeted tax breaks and family allowances to support parents, including:
Hungary, where certain family tax exemptions apply to mothers with multiple children, sometimes eliminating income tax entirely under specific conditions.
Various Western European nations that offer generous child allowances, childcare credits, and reduced tax brackets for families.
The approach is indicative of a broader demographic strategy increasingly common in developed economies: use the tax code to support families and offset economic headwinds.
Key Takeaways for Americans (Especially Those Abroad or Interested in Tax Policy)
While this is a Polish law, it raises themes Americans may find relevant:
Family-friendly tax policy exists outside the U.S. — Poland’s initiative is one of the boldest recent examples of using the income tax system to directly support parents.
Demographic challenges can shape tax reforms. Countries with low birth rates increasingly look to tax policy to encourage higher fertility and household stability.
U.S. tax policy uses different tools. In contrast, the U.S. has tax credits like the Child Tax Credit (CTC) and dependent exemptions — but not a complete elimination of income tax based on family size alone.
Tax professionals should watch global trends. These international developments highlight how tax policy can be used strategically to address societal challenges — a useful context for advising clients or comparing systems.
Poland’s new zero-income tax law for parents with two children is a striking example of how a government can use the income tax code to directly support families. By eliminating a significant tax obligation for qualifying households, Warsaw is betting that fiscal incentives will help families thrive and, over time, boost the nation’s demographic outlook.
For Americans watching from afar, it’s a reminder that tax policy isn’t only about revenue, but also a tool governments use to shape economic and social outcomes.
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