Tax Relief On Nursing Home Fees

An individual may claim tax relief in respect of the costs (less any amount paid by a public or local authority, insurance scheme or other compensation) of maintaining a relative in a nursing home which has been approved by the Minister for Health and Children. Tax relief is allowable provided the expenditure is necessarily incurred in the provision of maintenance and treatment required on the advice of a practitioner or diagnostic procedures carried out on the advice of a practitioner. Where the expenditure incurred relates to nursing home costs relief will only be allowed where access is provided to 24 hour nursing care on-site.

You can claim tax relief for nursing home expenditure under the general scheme for tax relief on certain medical expenses. Maintenance in a hospital or approved nursing home qualifies for relief. Most nursing homes are approved for tax relief. If you are unsure, Revenue has a list of the hospitals and nursing homes that are approved for tax relief. I would recommend that you review same before deciding on which nursing home is best suited to your mothers needs. You can claim tax relief on nursing home expenditure at your highest rate of tax (either 20% or 41%).

If you are self assessed for Income Tax purposes you can claim relief for the nursing home costs through your annual income tax return. If you are someone who pays tax under the PAYE system, you can apply to have the expenses allowed in your tax credit certificate. If this is the case, you should apply for the tax relief as soon as you start paying nursing home fees, as the tax relief can be applied to the current tax year.

Tax relief may also be available should you decide to employ a carer to assist your mother in her old age. Where a person is permanently incapacitated due to physical or mental infirmity, a tax allowance of up to €50,000 is available towards the cost of employing a person to care for the incapacitated person. You can claim this at your marginal tax rate. This credit may be claimed either by the incapacitated person or by a relative including relatives by marriage.