It is possible to claim tax relief on the cost of employing a carer either if you employ one for yourself, or for another family member.
You can employ the carer directly or you can use an agency that employs
carers. If you employ the carer yourself, you should register as an employer
and you will have responsibilities for your employee's tax and social insurance
(PAYE
and PRSI).
You will also have other duties and obligations as an employer, for example
regarding hours
of work, contracts
of employment, payslips,
holidays
and the minimum
wage.
If you pay an agency to provide the carer, the agency will employ the carer and
be responsible for their tax and social insurance etc. You can still claim tax
relief on the cost of paying the agency to provide a carer.
If you employ a carer for yourself or on behalf of a family member, you can claim the tax relief on the cost of that care. A family member is a spouse, civil partner, child or a relative, including a relation by marriage or civil partnership.
You must be totally incapacitated for the complete tax year (January to December) in which you are claiming the tax relief but the carer does not have to be employed for the full tax year. The term totally incapacitated means you are disabled to the extent that you require a carer.
You cannot claim tax relief for employing a carer if the carer only carries out housekeeper duties or if a Dependent Relative Tax Credit or an Incapacitated Child Tax Credit has already been granted.
You may be asked by the Revenue Commissioners to get a medical certificate to confirm the nature of your disability but it isn't necessary to send one in with your application form unless you are getting home nursing for a serious illness.
If you, or a family member has a serious illness and you employ a qualified nurse, you must provide the Revenue Commissioners with the following:
The medical certificate must state the following:
Tax allowances and reliefs reduce the amount of tax that you have to pay. The amount by which a tax allowance/relief will reduce your tax, depends on your rate of tax. You can find out more about how your income tax is calculated.
The maximum amount of relief for employing a carer is €50,000 in 2012.
You must claim the relief each year. You can get tax relief on the cost of employing a carer, less any amount recovered from the Health Service Executive (HSE).
If two or more of you pay for the care, the relief is divided between you in
proportion to the amount each paid.
You must claim tax relief on the cost of employing a carer each year.
PAYE taxpayer
If you are a PAYE taxpayer, you can apply for tax relief for
employing a carer on form HK 1 (pdf) or telephone Revenue Lo-call
Service.
Your certificate of tax credits will be increased to include the relief due. This means that you will pay less tax each week from your salary.
Self-assessment taxpayer
If you pay tax by self-assessment the claim for tax relief for employing a
carer should also be sent on form HK 1 and attached to your annual tax
return.
Send your completed application form to your local tax office.