(2021)
Can I also claim tax relief for assisting a person in need of care?
Jein. For the care of a person in need of care in your household, you can claim 20 percent of the costs, up to a maximum of 4,000 Euro (§ 35a EStg). You can deduct the care costs if the person being cared for is yourself or your spouse. In the past, the tax authorities also allowed the deduction of costs for the care of parents, even if they did not belong to your household. However, the Federal Fiscal Court (BFH) has rejected this (BFH ruling of 03.04.2019, VI R 19/17).
Eligible services include basic care, i.e. direct personal care (body care, nutrition, and mobility) or supervision. The tax benefit is only granted if the care and supervision are carried out in the household of the carer or the person being cared for. This can also be a household in a residential home or nursing home. The tax benefit is household-related. So if two people in need of care are looked after in one household, the tax benefit is only granted once. Care and support services also exceptionally include personal services, provided they are listed in the care insurance service catalogue, e.g. hairdressing, cosmetics, manicure, foot care.
Tip
Depending on the amount of your costs, it may be worthwhile to waive the care allowance. This is always worthwhile if 20 percent of your care expenses exceed this allowance. In this way, you can potentially deduct up to 4,000 Euro of care costs directly from your tax liability.
Current The Berlin-Brandenburg Fiscal Court has also dealt with the issue of covering care costs for a parent. According to this, § 35a EStG favours - if at all - only expenses for the outpatient care of relatives in the taxpayer's own household (i.e. the carer's), not for the outpatient care of relatives in their household (ruling of 11.12.2019, 3 K 3210/19). HOWEVER: An appeal was explicitly allowed, which has since been filed (Az. VI R 2/20). The BFH will therefore have to address the issue of covering care costs again.
From 2021, the care allowance for home care with care level 4 or 5 will be doubled, and a new allowance will be introduced for care levels 2 and 3. The allowance amounts to
- for care level 2: 600 Euro
- for care level 3: 1.100 Euro
- for care level 4 or 5 or helplessness: 1.800 Euro
Tip
We recommend initially claiming the relevant costs for the outpatient care of parents and lodging an appeal against any negative decisions. Request that your own proceedings be suspended until the senior tax judges have made a decision in the current case. Regardless of this, it should be checked whether the costs can be claimed as extraordinary expenses if not as household-related services. However, you can only deduct the expenses incurred if the person in need of care cannot pay the care costs themselves.
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