Who can claim medical expenses as exceptional costs?

Anyone who can provide evidence of medical expenses can also declare them in their tax return. You will need a receipt, an invoice and, in some cases, a medical certificate. It does not matter whether you incurred the expense for your own illness, for that of your spouse or for a child for whom you are entitled to child benefit. What counts is the date you paid the invoice, not the date it was due.

If you have medical expenses related to a commuting accident or a work accident, you should declare them as income-related expenses or business expenses. This also applies to costs incurred due to an occupational illness or retraining due to illness. The advantage is that in this case a reasonable burden is not deducted.

(2023): Who can claim medical expenses as exceptional costs?

What are medical aids?

Aids are intended to compensate for limitations caused by illness or disability. Particular emphasis is placed on supporting the development of children and preventing impending care needs.

Medical aids include, for example:

• Hearing and visual aids,
• Orientation, mobility or reading aids,
• Wheelchairs (or walking aids),
• Prostheses, orthopaedic stockings, etc.,
• Blood pressure and blood sugar monitors, and
• other similar aids needed in individual cases.

(2023): What are medical aids?

What medical expenses can I deduct?

As medical expenses, you can deduct all costs incurred in connection with an illness. You can enter these in your tax return as extraordinary expenses without any limit.

The tax office automatically deducts the reasonable deductible, which depends on your income, marital status, and number of children. This deductible ranges from one to seven percent of your annual income and is taken into account for all general extraordinary expenses, including medical expenses.

Expenses you can claim as medical costs include:

• medical treatment
• health spas, physiotherapy, etc.
• care services
• alternative practitioners or homeopaths
• medications
• pharmacy co-payments
• medical aids
• hospital stays
• trips to the doctor, hospital, physiotherapy, etc.

Travel expenses: If you travel to the doctor by public transport, you can deduct the actual costs incurred, so keep the tickets (ticket, train ticket). However, if you travel by car, you can deduct a flat rate of 0.30 Euro per kilometre.

You can also claim the costs for dental prostheses or a cure. However, not the expenses for visiting a sick person or measures to prevent illness, such as a diet or a back massage for relaxation, for example.

For health courses aimed at fitness or weight reduction that are not prescribed by a doctor, you should try to get a credit from your health insurance company through a bonus booklet. Many statutory health insurance companies offer this – ask your health insurance company directly.

Conversely, you must also deduct reimbursements or co-payments from the health insurance, pension, or accident insurance from your expenses before you enter them in the tax return. However, you do not have to have payments from daily sickness allowance insurance credited.

Statutory health insurance companies often offer their customers bonus programmes for health-conscious behaviour under § 65a SGB V and then pay cash bonuses for this. The health insurance companies can determine for themselves which services are rewarded, e.g. preventive examinations, vaccinations, healthy eating, or sporting activities. Such bonus payments to promote health-conscious behaviour are not a refund of contributions. Therefore, the health insurance contributions deductible as special expenses are not reduced (BFH ruling of 1.6.2016, X R 17/15; BFH ruling of 6.5.2020, X R 16/18).

However, there are still services provided by statutory health insurance companies that are considered "genuine" refunds of contributions and therefore reduce the deduction for special expenses.

Currently, the Federal Ministry of Finance has once again commented on the distinction between bonus payments and refunds of contributions (BMF letter of 16.12.2021, BStBl 2022 I p. 155). According to this, among other things:

• Refunds of contributions that reduce the deduction for special expenses also include premium payments under § 53 SGB V. These are, for example, premiums for insured persons participating in general practitioner-centred care. If the benefit is granted in the form of bonus points, these must be converted into Euro and reported as a refund of contributions. Bonuses for family-insured bonus programme participants are to be attributed to the main insured person.
• A refund of contributions also exists if a bonus from the statutory health insurance relates to a measure covered by basic health insurance (in particular health prevention or protection measures, e.g. for the early detection of certain diseases) or is paid for behaviour independent of expenditure (e.g. non-smoking status, healthy body weight).
• If the statutory health insurance reimburses or rewards costs for health measures under a bonus programme according to § 65a SGB V that are not included in the regular insurance coverage of basic health insurance (e.g. osteopathy treatment) or serve to promote health-conscious behaviour (e.g. membership in a sports club or gym) and have been or are privately financed by the insured, this is not a refund of contributions. The health insurance contributions deductible as special expenses are therefore not to be reduced by the amount of the cost reimbursement or the bonus attributable to it. A flat-rate bonus payment does not have to cover the actual costs incurred exactly.

Tip 1: For simplification purposes, it can be assumed that bonus payments made on the basis of § 65a SGB V do not reduce the deduction for special expenses up to an amount of 150 Euro per insured person. If the bonus payments exceed this amount, the amount exceeding this is a refund of contributions that reduces the deduction for special expenses. The taxpayer is free to prove that there is no refund of contributions for bonus payments of more than 150 Euro. This means they must demonstrate that the bonus payments under § 65a SGB V were made to promote health-conscious behaviour. This regulation applies in all open cases and for payments made up to 31 December 2023.

Tip 2: In fact, statutory health insurance companies are required to check whether a payment that is neutral or reduces special expenses has been granted. They must inform the tax authorities electronically, and the corresponding data is then automatically included in the respective tax assessment. However, experience shows that the programme-controlled notifications are not always correct. And the current non-objection limit of 150 Euro is likely not to have been observed in many cases. Therefore, check whether the correct values have been applied in your tax assessment.

Tip 3: At the end of 2020, the Federal Fiscal Court ruled that bonus payments from private health insurance "to promote cost-conscious behaviour" are to be regarded as a refund of contributions and therefore reduce the deductible special expenses if the bonuses are paid regardless of whether the policyholder has incurred financial health expenses or not (BFH ruling of 16.12.2020, X R 31/19).

(2023): What medical expenses can I deduct?

How do I provide evidence of medical expenses?

You must provide evidence of expenses for medication, remedies, and other medical costs with receipts. The tax office also requires proof that the medication or treatment is medically necessary. You usually need a doctor's prescription for this. If you have a chronic illness, presenting the medical certificate once is usually sufficient. If your ophthalmologist has prescribed glasses for you once, a confirmation from the optician is sufficient for the necessity of expenses for further glasses.

As soon as you have a medical certificate from your doctor recommending a specific measure or medication, collect the receipts. Only at the end of the year will you know the total amount of your expenses for remedies and treatments. Medical costs, together with expenses for other general extraordinary burdens, form a total. You can then use our overview to calculate whether it is worthwhile to include them in your tax return, as the tax office deducts your reasonable personal contribution from the actual expenses. Only the amount that exceeds the reasonable burden has a tax-reducing effect.

In certain cases, the medical necessity must be proven by a certificate from the public health officer or a statement from the Medical Service of the Health Insurance. It is important that this proof is obtained before the treatment begins or before the medical remedy is purchased. This strict proof is required in the following cases:

• Bath or spa treatment; in the case of a preventive spa treatment, the risk of an illness to be averted by the treatment, in the case of a climate treatment, the medically indicated spa location and the expected duration of the treatment must also be certified,
• psychotherapeutic treatment,
• medically necessary accommodation away from home for a child of the taxpayer suffering from dyslexia or another disability,
• need for the taxpayer to be accompanied by a carer, unless this is already evident from the severely disabled person's pass,
• medical aids considered to be general everyday items,
• scientifically unrecognised treatment methods, such as fresh and dry cell treatments, oxygen, chelation, and autologous blood therapy.

The certificate must contain sufficiently specific information about the spa location in accordance with § 64 para. 1 sentence 1 no. 2a EStDV. The statement "in a tropical climate" alone is not sufficient to determine the spa location. The certificate must show that the taxpayer is ill and that a stay at a specific spa location for a certain period is medically indicated. The public health officer must specify in their statement where exactly a climate treatment is medically indicated due to the existing conditions (FG Münster, judgement of 23.2.2022, 7 K 2261/20 E).

The Federal Fiscal Court has recently ruled in favour of taxpayers that expenses for liposuction to treat lipoedema are deductible, and from 2016 onwards, they can be considered as extraordinary burdens without the need for a medical report from a public health officer or a medical certificate from a Medical Service of the Health Insurance before the operations (BFH judgement of 23.3.2023, VI R 39/20).

(2023): How do I provide evidence of medical expenses?