Tax Deduction For Medical Expenses
For all PAYE workers medical expenses can be claimed against income tax for the entire family. It means that you are entitled to get back the standard rate of tax on medical expenses which included medicines that are used, doctors visits etc. For families in this group this can be a significant sum of money. Below is an article which goes into more detail relating to the liver children from the experience of one of our parents.
What is the entitlement?
Allowable medical expenses are allowable against income tax at the standard rate(lower rate). Expenses are claimed for the medical expenses in the year they occurred or paid. Expenses can be claimed for the 4 years prior to the current year.
How to claim?
PAYE workers can claim medical expenses using a Med 1 form.
This can be printed off http://www.revenue.ie/en/tax/it/forms/med1.pdf or sent to you by phoning your local revenue office. Put ‘medical expenses’ into the search box and the form will be in the results.
People who fill in a tax return(self employed etc) can claim medical expenses as part of their annual tax return.
You need to keep the receipts of all the medical expenses claimed for 7 years. They do not need to submitted but they have to be available for audit.
If you are claiming milage and you are audited you need to be able to show evidence of hospital visit/stay. If requested the hospital should be able to provide evidence of your visit.
What to claim
Revenue has a guide to claiming Health/Medical Expenses Relief-IT6 which is well worth reading.
Items that have been claimed for.
A. Medical expenses
All doctors and consultant bills can be claimed against tax. Should you be getting a rebate from your health insurer this needs to be deducted off the total.
B. Total outlay on prescribed drugs/medicines for the year.
This includes the excess payable on the Drug Payment Scheme (currently EUR120) and the cost of any prescription medicines which you have had to pay for.
C. Other Qualifying Expenses
If you read the guide to other qualifying expenses there are 2 sections which we found interesting:-
1. ‘Can I claim relief on the cost of medical treatment obtained outside the State?
As regards treatment outside the State, the following expenses qualify for tax relief:
the cost of qualifying treatment carried out by a practitioner (GP, consultant or dentist) provided such practitioner is entitled under the laws of the country in which the care is provided to practice medicine or dentistry there
the cost of maintenance or treatment in a hospital, nursing home or clinic is allowable provided that the nursing home or clinic provides access to 24 hour nursing on-site
Note for the years 2007 to 2009 inclusive the institution must be entered on the Revenue list of approved hospitals and nursing homes.
Where the relevant qualifying health care is only available outside of the State, then the cost of reasonable travelling and accommodation expenses are also allowable. In such cases, the expenses of one person accompanying the patient may also be allowed where the condition of the patient requires it. Where the patient is a child, the expenses of one parent may generally be allowed and, exceptionally, of both parents where it is clear that both have to be in attendance.
Laura’s trips to London all occurred in 2010 and we haven’t worked out what we’re allowed claim yet. Our intention is to find out more about this during 2011.
2. ‘My child has a life threatening illnes or permanent disability and attends hospital on a regular basis. I have large travel expenses and pay car parking fees, phone and accommodation costs. Can I claim tax relief on any of these expenses?
Apart from obvious health related expenditure, tax relief is also available in respect of other expenditure incurred in respect of children with life threatening illnesses (including child oncology patients) and children with permanent disabilities who require constant or regular hospital care. Constant or regular hospital care does not necessarily mean being permanently in hospital. However, it does imply regular hospital attendance or supervision appropriate to the serious illness. The qualifying items of expenditure are -
The following qualifies for relief -
the cost incurred in transporting [unlimited journeys] the child and accompanying parents or guardians to and from hospital in respect of the patient
the cost incurred by the parents or guardians of the child in visiting the hospital when the child is an ‘inpatient’ where such trips are shown to be essential to the treatment of the child.
If a private car is used, the cost of travel is determined at a rate as per kidney patients at kidney patients section. No relief is available for car parking fees.
Where the child is being treated at home, a flat rate of €300 to include telephone rental and calls may be claimed where the expenses are incurred for purposes directly connected with the treatment of the child. The rate available in previous years is as follows:
Payments made by the parent or guardian to a hospital, hotel or B&B in respect of overnight accommodation in or near the hospital where the child is a patient where such overnight stay is necessary for the treatment of the child.
Hygiene products and special clothing
The cost incurred in respect of these items subject to a maximum of €500 per year.’
What is the meaning of ‘Health Expenses’? – Certain items of expenditure in respect of a child suffering from a serious life threatening illness.
When we rang Revenue about what ‘serious life threatening’ illness means we didn’t get a straight answer but the lady said that a letter from a GP or consultant would be required if the expenses claimed were queried. I said that my daughter had just had a liver transplant and she said that this is the type of area the relief is aimed at but they don’t have a list of illnesses that are allowed. I suggest that you ring your local revenue office and ask them about your child’s condition.
Once you have worked out the total amount you want to claim in section j put the amount into the box on the med 11 form and put in a brief detail below.