Are boarding school fees partially deductible as childcare costs?
Expenses for boarding school accommodation for a healthy child for educational purposes are unfortunately not tax-deductible. These expenses are considered typical educational costs, covered by child benefit or the child and BEA allowance (for care, education, and training). Boarding school costs are also not deductible if the accommodation is for social, psychological, or educational reasons, such as if the child is difficult to educate, has learning difficulties, or the parents are unable to care for the child.
However, if a stay at a boarding school is due to illness or disability, boarding school costs may be deductible as extraordinary expenses. It is important that medical treatment is the primary focus and the school attendance is incidental and secondary to this treatment. In such cases, boarding school costs are direct medical expenses and can be fully deducted as extraordinary expenses under § 33 EStG, subject to the deductible burden.
The Thuringia Tax Court allows boarding school costs (excluding meals) to be deducted as special expenses within the maximum limits (FG Thuringia, 2 K 95/15). This applies if the boarding school offers holistic care and education for the child.
The Münster Tax Court ruled that the costs for private schooling of a gifted child do not constitute extraordinary expenses (FG Münster, judgment of 13.06.2023, 2 K 1045/22 E). The parents claimed the boarding school costs as extraordinary expenses because their daughter has a special learning ability and high intelligence. The court rejected the claim, classifying the expenses as private living costs rather than direct medical expenses. The parents referred to a letter from the public health service confirming the health reasons for the school change. Nevertheless, the court decided that the criteria for recognition as medical expenses were not met.
However, in 2011, the Federal Fiscal Court (BFH) ruled that expenses for school attendance and boarding accommodation for a gifted child can be deductible as extraordinary expenses if the school attendance is medically indicated (BFH judgment of 12.05.2011, VI R 37/10).
This medical indication does not necessarily have to be proven by a previously issued certificate. The court may also accept suitable evidence at a later date. If the BFH follows the plaintiff's view, the costs of school attendance and boarding accommodation could be recognised as direct medical expenses.
An appeal against the Münster Tax Court's decision has been lodged with the Federal Fiscal Court (Ref. VI B 35/23).
