One of the most targeted corrections to living-standard imputed income now concerns dependent children with their own income. As announced by the Finance Ministry, starting in 2026, the minimum imputed income of €3,000 will no longer be applied to them. Until now, this rule — combined with other property-based imputed expenses such as real estate or cars — led thousands of young people, mainly students or conscripts, to be taxed on income they didn’t actually have once the tax-free threshold was exceeded.

Under the current system, anyone with even a small income — as little as €100 or €500 per year — is considered to be “living independently” and thus must file a tax return. If their actual income is lower than €3,000, the tax office ignores the real figure and imposes the €3,000 minimum imputed income instead. This rule was applied even to dependent children, who do not have full tax independence.

For example, a student declaring €500 from part-time work was not taxed on the €500, but on an imputed €3,000. The tax office reasoned that if they had any income at all (and therefore had to file a return), they must also have the minimum means of subsistence — set at €3,000. In practice, this often left them untaxed unless they also owned assets, but it created major side effects.

The problem was not just tax liability. That imputed income was counted toward the total household income, leading to the loss of social benefits (such as child or housing allowances), and even reducing the 50% ENFIA property tax discount. In other words, a child’s imputed income could disqualify the entire family from support simply because they had declared €200 or €500 from a job or reimbursement.

With the new measure, dependent children who declare income (from work, scholarships, or military service) will be exempt from the €3,000 imputed minimum. This means if a student declares €500, they will be taxed only on that amount, not €3,000. If their earnings remain below the tax-free threshold, they won’t owe any tax at all. More importantly, their real — not imputed — income will be counted toward the family’s total for benefits and tax relief.

The reform will affect more than 470,000 taxpayers, mostly parents with children who are studying or starting work. Its goal is to strengthen tax compliance without distortions or disincentives. Although it costs the budget only €40 million, it corrects a long-standing injustice.