What special features apply to care and support services?
Household-related services as defined in Section 35a of the Income Tax Act (EStG) also include care and support services for individuals in need of care. Services provided by mobile care services as well as self-employed carers are eligible, provided they are carried out in the household of the person being cared for or in the taxpayer's household.
Tax benefits
Care and support services can be deducted as household-related services up to 20.000 Euro annually at 20 per cent, i.e. a maximum of 4.000 Euro per year, directly from the tax liability.
A determination of care needs or the indication of a care level is not required. It is sufficient if the services are for basic care or support, e.g.:
- Personal hygiene
- Nutrition
- Mobility
- Everyday support and supervision
Care in one's own or another household
According to the case law of the Federal Fiscal Court, a distinction is made between:
- Own care or support: Tax reduction possible if the expenses are for one's own care.
- Care of relatives: Children can also deduct costs for the outpatient care of their parents under certain conditions.
Overview of case law
BFH ruling of 03.04.2019 (VI R 19/17): No tax reduction if children cover their parents' nursing home costs, as these do not occur in their own household.
FG Berlin-Brandenburg, ruling of 11.12.2019 (3 K 3210/19): Initial rejection of tax reduction for care services in the household of a relative; appeal was allowed.
BFH ruling of 12.04.2022 (VI R 2/20): The tax reduction under Section 35a (2) sentence 2 EStG also applies if children bear the costs for the outpatient care of their parents – even if the care takes place in the parents' household.
Important difference: Outpatient vs. inpatient care
- Outpatient care: Tax reduction possible if the taxpayer is the contractual partner of the care service.
- Inpatient care: No tax reduction, as the service is provided outside a private household.
Note: The tax reduction can only be granted if the taxpayer receives the care service at their own expense. If only a relative's invoice is paid, this constitutes third-party expenses for tax purposes, which are not deductible.
