The incoming President has proposed important amendments to the Personal Income Tax Act that would increase the first income tax threshold and introduce substantial tax relief for taxpayers raising at least two children.

Under the draft amendment submitted to the Sejm on 8 August 2025, the first income tax threshold would be raised from the current PLN 120,000 to PLN 140,000 a year for all taxpayers. This change means that annual income up to PLN 140,000 would be taxed at 12%.

In addition, the President has proposed a significant increase in the personal tax allowance specifically for taxpayers raising two or more children and taxed under the general tax scale. The tax-free allowance for these taxpayers would increase dramatically from PLN 30,000 to PLN 140,000 per year. For families where both parents are working and eligible, this amounts to a combined PLN 280,000 of tax-free income annually.

This parental tax relief would apply to parents exercising parental authority, legal guardians, and foster families. However, it will not be available to taxpayers using other forms of taxation or those subject to the solidarity levy.

At this stage, it remains unclear how this new relief will coordinate with other existing family-related benefits, such as the child tax credit or allowances for families with four or more children.

The draft act is still at an early stage of the legislative process and we will continue to monitor developments closely to keep you informed of all significant changes.

Find more articles in PRO HR August 2025.