Millions of euro is going unclaimed in tax relief
Are you caring for a child or ill person? You might be missing out on valuable tax reliefs.
Millions of euro are going unclaimed in tax relief for medical expenses, home care, and nursing home costs.
At Taxback.com, we’ve discovered that up to a third of eligible Irish taxpayers are unaware of the tax reliefs for those caring for ill relatives or children with permanent disabilities.
The cost of caring for an ill person or someone with a permanent disability can be high and often unavoidable, however if you’re in this position, you should find out about the reliefs available to help offset this.
At Taxback.com, we’ve discovered that up to a third of eligible Irish taxpayers are unaware of the tax reliefs for those caring for ill relatives or children with permanent disabilities.
The cost of caring for an ill person or someone with a permanent disability can be high and often unavoidable, however if you’re in this position, you should find out about the reliefs available to help offset this.
Nursing Home Fees
While 30,000 people are in nursing homes in Ireland as part of the State’s Fair Deal scheme, not everyone qualifies.
However you can still apply for relief on the cost of paying for yourself or for someone else staying in a nursing home. The tax relief for nursing home fees still remains available at the higher rate of income tax you pay up to 40%.
And while typically you claim tax relief for these expenses at the end of the year, in some cases it may be available during the year.
While 30,000 people are in nursing homes in Ireland as part of the State’s Fair Deal scheme, not everyone qualifies.
However you can still apply for relief on the cost of paying for yourself or for someone else staying in a nursing home. The tax relief for nursing home fees still remains available at the higher rate of income tax you pay up to 40%.
And while typically you claim tax relief for these expenses at the end of the year, in some cases it may be available during the year.
Employing a Home Carer
If you employ a carer for yourself or a family member in your own home then you can claim tax relief on the cost. A family member in this case is considered to be a spouse, civil partner, child or relative, including relation by marriage or civil partnership.
You can employ the carer directly or use an agency, however if you do employ a carer yourself, just keep in mind that you must register as an employer and will be responsible for their tax and social insurance.
If you use an agency, then they will take care of any tax and social insurance obligations.
The person being cared for should be incapacitated for the full tax year, however the relief doesn’t require that the carer is actually employed for the full year.
If a qualified home nurse is required, then you should be able to provide receipts of payments to nurses and a medical certificate from a doctor.
If you employ a carer for yourself or a family member in your own home then you can claim tax relief on the cost. A family member in this case is considered to be a spouse, civil partner, child or relative, including relation by marriage or civil partnership.
You can employ the carer directly or use an agency, however if you do employ a carer yourself, just keep in mind that you must register as an employer and will be responsible for their tax and social insurance.
If you use an agency, then they will take care of any tax and social insurance obligations.
The person being cared for should be incapacitated for the full tax year, however the relief doesn’t require that the carer is actually employed for the full year.
If a qualified home nurse is required, then you should be able to provide receipts of payments to nurses and a medical certificate from a doctor.
The maximum amount of relief for employing a carer is €75,000 in 2018 (it was €75,000 in 2017, 2016 and 2015 and €50,000 in 2014).
Home Carer’s Tax Credit
If you’re married or in a civil partnership and one of you stays at home to mind a relative, including a child, then you could qualify for the Home Carer’s Tax Credit. The Home Carer’s Tax Credit rate for 2018 is €1,200.
The credit is available to a jointly assessed couple with one or more dependents where the carer has an income of less than €7,200. If you earn more than €7,200 (or more than €5,080 up to and including 2015), you’ll receive a reduced tax credit. In this case, your total tax credits will be reduced by one half of the difference between your income and €7,200 (or €5,080 for years up to and including 2015). If your income is €9,600 or more during 2018 then you can’t claim the tax credit.
The dependent person can be a child in receipt of child benefits, a person aged 65 or over, or someone with a disability requiring care but not a spouse or civil partner.
The credit is available to a jointly assessed couple with one or more dependents where the carer has an income of less than €7,200. If you earn more than €7,200 (or more than €5,080 up to and including 2015), you’ll receive a reduced tax credit. In this case, your total tax credits will be reduced by one half of the difference between your income and €7,200 (or €5,080 for years up to and including 2015). If your income is €9,600 or more during 2018 then you can’t claim the tax credit.
The dependent person can be a child in receipt of child benefits, a person aged 65 or over, or someone with a disability requiring care but not a spouse or civil partner.
Incapacitated Child Credit
If you’re a parent or guardian of a child who is permanently physically or mentally incapacitated, then you may qualify for the Incapacitated Child Credit. For 2016 and 2017 the Incapacitated Child tax credit is €3,300. In 2018, the Incapacitated Child Tax Credit is €3,300.
If you’re a parent or guardian of a child who is permanently physically or mentally incapacitated, then you may qualify for the Incapacitated Child Credit. For 2016 and 2017 the Incapacitated Child tax credit is €3,300. In 2018, the Incapacitated Child Tax Credit is €3,300.
To qualify, the child should:
- Have become incapacitated reaching 21 or
- Became so after reaching 21, but while still in fulltime education or training for a trade or profession for a minimum of 2 yrs.
You can also claim the credit for:
- A stepchild
- Adopted child
- Any child of whom you have custody, who you maintain.
Medical and Dental Expenses
A huge proportion of people who have medical and dental expenses in Ireland don’t claim tax relief on the cost. The relief is given at the standard rate of 20%.
Items that qualify
- Doctor and consultants fees
- Items or treatments prescribed by a doctor or consultant
- Maintenance or treatment in a hospital
- Costs of speech and language therapy carried out by a speech and language therapist
- Transport by ambulance
- Educational and psychological assessments
- Certain items for a child suffering from a serious life threatening illness
- Kidney patient expenses
- Routine maternity care
- In-vitro fertilisation
- Specialised dental treatment
You can also claim tax relief on the cost of medical treatment you incur outside the state from a qualified practitioner. And if you pay for health insurance where the tax relief is not granted at source, then you can apply for a health insurance tax credit.
Claiming the reliefs
When you pay for the cost of caring of a loved one, it can be difficult to know what reliefs you qualify for and there are also certain reliefs you cannot claim while you are claiming others.
ISO certified tax specialists at Taxback.com can send you a no-obligation estimate of any refunds due and will go back 4 years so you could end up claiming a sizeable amount.