Recently, the State Council of the PRC released a Notice on the Establishment of Individual Income Tax Special Additional Deduction for Infants Nursing under 3 Years Old, which stipulates that the nursing expenses for children under 3 years old will be deducted from individual income tax (IIT) taxable income as special additional deductions, effective from 1 January 2022. There are only 6 categories special additional deductions can be deducted from IIT taxable income before.

The updated categories and deduction amount of IIT special additional deductions are as follows:

1. Nursing Expenses for Children under 3 Years Old: RMB1,000/month for each child can be deducted.
   
   
2. Children’s Education: RMB1,000/month for each child can be deducted.
   
   
3. Continue Education:
   

   (1)	Academic (degree) education: RMB400/month up to 48 months can be deducted.
   (2)	Skilled personnel or specialized technical professional qualification: RMB3,600 can be deducted in the year when the related certificate is obtained.

   
   
4. Medical Expenses for Serious Illness: Medical expenses exceeding RMB15,000 and borne by the individuals can be deducted based on actual basis during the annual IIT settlement period. The maximum amount is RMB80,000.
   
   
5. Housing Loan Interest: RMB1,000/month up to 240 months can be deducted.
   
   
6. Housing Rent:
   

   (1)	RMB1,500/month can be deducted in a municipality directly under the Central Government, a provincial capital, a city specifically designated in the State plan or any other city determined by the State Council.
   (2)	RMB1,100/month can be deducted in other city with a registered population of more than 1 million; RMB800/month can be deducted in other city with a registered population of less than 1 million.

   
   
7. Expenses for Supporting the Elderly:
   

   (1)	RMB2,000/month can be deducted where the taxpayer is the only child.
   (2)	Where the taxpayer is not the only child, the deduction shall be equally apportioned among the taxpayer and siblings. However, the apportionment shall not exceed RMB1,000/month.

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