Home Care Tax Relief
Private home care can make a huge difference to your quality of life or the quality of life of a loved one. It can help you or your loved one remain independent and stay in your own home. The government recognises this and that is why home care fees are a tax deductible expense.
That means if you're paying home care fees and you're paying tax, then you should be entitled to tax relief on the fees paid. This is true whether you are the individual being cared for or you're paying fees on behalf of a close relative/guardian.
Assuming a monthly fee of €200 Applies
Net Cost (20% Marginal Tax Rate)
Net Cost (40% Marginal Tax Rate)
Monthly Home Care Cost
Who Can Claim the Tax Back on Home Care Fees?
Whoever pays the fees is entitled to claim the tax back. However, if you don't pay any taxes, a family member can still claim the tax deduction by putting the bills in their name. They can then transfer the funds to you (a limit of €75,000 at their marginal tax rate applies).
How Does the Home Care Tax Relief Work?
As you can see from the table above, the tax deduction applies at the claimants marginal tax rate. Once approved, you can claim tax relief on a monthly basis through your salary or do it as part of your annual return if you prefer to receive it all at once.
How Do I Apply for the Home Care Tax Relief Work?
The first thing you need to do to claim home care tax relief in Ireland is to fill out Form HK1 "Claim for an Allowance for Employing a Carer" on the Revenue Commissioners website. If you're employing the individual directly, you will need to be making their PRSI contributions and so on. Using an agency removes such requirements and significantly simplifies the process.
Disclaimer: Woodbrook Care is not a tax or financial adviser and rules and regulations around tax allowances are subject to change. We recommend that you obtain independent tax advice and/or satisfy yourself that you are entitled to the tax deductions outlined before making a decision to employ a carer. Citizens Information have a good page on the topic.