Deduct nursing care costs from your taxes
A Guide for Family Caregivers and Those Affected
Caring for relatives or receiving care yourself in old age can not only be emotionally stressful but also have significant financial consequences.
In Germany, however, there is the possibility of deducting care costs. Tax relief for care services offers valuable support for family caregivers and people in need of care.
In this blog post, you will learn how to deduct care costs, which care services are recognized for this purpose, and what the care tax is all about.
What are care costs and which care services can be deducted?
Deducting care costs means that you, as a taxpayer, can deduct certain expenses related to the care of a relative or your own care from your taxes. These tax benefits are intended to help reduce the financial burden that can arise from care.
Care services include all costs incurred in connection with the care and support of a person. In addition to direct care costs, this can also include expenses for aids, care aids, or home care by a nursing service. The exact expenses you can deduct depend on whether you are providing home care or are in a stationary care facility.
Deducting nursing costs: Which expenses are tax-deductible?
Deducting care costs is not entirely straightforward. However, there are many types of costs that you can deduct from your taxes under certain conditions. Here's an overview:
1. Costs for home care:
If you care for a relative at home, you can deduct expenses for care services as care costs. This includes, for example, payments to professional caregivers or care services that help with care. The costs for a domestic helper who assists with daily care are also deductible.
2. Care aids and medical care:
If special care services are necessary for care, such as care beds, wheelchairs, lifting aids or incontinence products, these can also be deducted as care costs.
3. Travel costs:
If you regularly drive to a nursing home or to a patient by car or public transport to visit or care for them, the travel costs can be deducted as care costs. You can claim travel costs according to the usual mileage rates or as a lump sum.
4. Costs for care facilities:
If a relative in need of care lives in a nursing home, you can deduct a portion of the care services for the nursing home as care costs. This includes the monthly care fees that arise for inpatient care.
5. Long-term care insurance:
Contributions to long-term care insurance can also be deducted as care costs under certain circumstances, especially if you have taken out private long-term care insurance.
6. Care pension and domestic help:
If you, as a caring relative, are unable to work yourself and are dependent on income support, you can deduct care costs and thus claim part of the loss of earnings.
How do you claim nursing care costs?
To deduct care costs, you must declare them correctly in your tax return. There are various methods for claiming these expenses:
1. Exceptional burdens
Deducting care costs is generally only possible if the expenses constitute an "exceptional burden." This means that the care costs must represent a financial burden for you that goes beyond the usual extent. For this purpose, there is a so-called reasonableness rule, which states that a tax deduction is only possible if the care costs exceed a certain income threshold.
As an exceptional burden, you can, for example, deduct care services that are necessary due to the severity of the need for care. The amount of deductible costs depends on your income and marital status.
2. Household-related services
If you use care services such as a household helper or other activities to support you in the household, these can be deducted from tax as household-related services. In this case, 20% of the costs, up to a maximum of 4,000 euros annually, are tax deductible.
3. Care lump sum
There is also the option of claiming a care lump sum, which is granted as a flat rate if you care for a family member in need of care. This lump sum is not calculated individually but is a fixed amount. The care lump sum is usually granted if the person in need of care has a care level 2 or higher.
4. Need for care and care level
To deduct care costs, the person concerned must be in need of care and have a recognized care level. In Germany, the care level is determined by the Medical Service of the Health Insurance Funds (MDK). Depending on the severity of the need for care and the care level, different costs arise, which you can then claim for tax purposes.
Care Tax: What is it and how does it affect your tax return?
The "Pflegesteuer" (care tax relief) refers to a tax benefit for caring for relatives or people in need of care. It includes both the option to deduct care costs and lump-sum amounts specifically provided for care services. It should be noted that care costs can generally only be deducted if they represent an extraordinary burden and are not covered by long-term care insurance.
The care tax relief is intended to ensure that the financial burden of caregiving is reduced, helping family caregivers to manage their expenses. This also includes the option to include care pension costs and travel expenses in the tax return.
Tax Relief for Family Caregivers
Family caregivers can benefit from the care tax by claiming their care services for tax purposes and thus reducing their tax burden. This can be a great help, especially if care is needed over a long period of time and the associated care costs represent a significant burden.
It should be noted that the tax return must be completed particularly carefully in this case. It is advisable to keep all receipts for care costs, such as invoices for care services and care aids, well archived. If you are unsure, you can seek the support of a tax advisor.
Being able to deduct care costs offers a significant opportunity for financial relief to caring relatives and people in need of care. Whether through care services that are tax-recognized or through the care tax, which can be claimed as an extraordinary burden – the tax declaration can thus become important support in everyday care. Anyone wondering how to deduct care costs should inform themselves early about the various options and, if necessary, seek professional help. This way, the financial burdens of care can be better managed.
