Claiming Tax Relief on the Cost of Live-in Homecare
You can claim up to 40% tax relief on homecare if your relative is incapacitated. You need to fill in the HK1 Revenue.ie form. You can find this form and related information booklet on Revenue.ie
The amount of tax relief you get depends on how much income tax you pay. So the 40% tax relief is not automatic. It depends on your own tax situation. If you pay a lot of tax, then you will be able to reclaim a lot of tax, up to a maximum of 40%. If you pay very little tax, then you will only be able to reclaim very little tax.
If you are a PAYE tax payer, then you will see the impact of the tax relief in your payslip shortly after you have submitted your HK1 form. If you are self-employed, then your accountant will assist you will claiming this tax benefit and it will probably be done as part of your tax returns at the end of the tax year.
Note: You don’t need a doctor’s certificate or a consultant’s report on your relative to proof that your relative is incapacitated. It is a self-declaration form that you are filling in which it is your own declaration that your relative is incapacitated. Having said this, it would be advantageous to ask your GP for a letter stating that in their own opinion your relative needs full time care.
If more than one family member is paying the cost of your elderly relative’s care, then in such cases, each of those family members should submit their own HK1 form for their portion of the overall cost. It would be a recommend that the family members draw up an agreement stating the portions of the cost each family member will cover and attach a copy of this agreement to the HK1 form when you are submitting it.
Things you can claim tax relief on include:
The carer’s gross salary
Employer PRSI
Holiday Pay for the carer
Payroll costs
ALHomecare’s fees
Carer’s food
A portion of the internet service cost
If your carer is travelling from abroad to take up the placement, then you can claim tax relief on the cost of her flight and any quarantine and/or PCR tests incurred as well.
Equipment or consumables that you purchase which are related to your relative’s care
Plus any other justifiable costs that relate to the care of your relative
You should itemise these costs on a separate sheet of paper and attach this to your HK1 form submission.
