Tax relief on Medical Expenses
Most of us normal folks incur medical expenses from time to time on prescriptions, doctors, consultants and various other costs for dentists and opticians. Therefore I thought it would be useful to give a small bit of insight into what you can claim for and what is not allowed. It is possible to claim a 20% tax credit on allowable medical expenses. For example, if you paid €1000 in 2016 on prescriptions and doctors you could claim a tax credit of €200 to reduce your tax bill or get a tax refund for that amount. Everyone’s circumstances are different but we see quite a few cases where expenses are well in excess of €1000 so it can be a valuable tax relief once you have your receipts to back-up the costs you incurred. This tax relief is open to all taxpayers whether you are an employee or self-employed. To qualify for medical expenses relief your care must be carried out by a registered medical practitioner.To check out if a doctor is on the register you can click on the link below.
Who can you claim for?
You can claim for expenses paid for you, your spouse and any family member and anyone else provided you have paid for the costs. It is vitally important that you get a receipt for the payment as proof of the payment and date the payment was made so don’t be shy about asking for one. The most common expenses that can be claimed are the following;
- doctors and consultants fees
- diagnostic procedures carried out on the advice of a practitioner
- drugs and medicines supplied by a pharmacist and prescribed by a doctor, dentist, or consultant
- maintenance or treatment in a hospital in connection with the services of a practitioner
- supply, maintenance or repair of any medical, surgical, dental or nursing appliance used on the advice of a practitioner
- orthoptic [eye care] or similar treatment prescribed by a practitioner
- transport by ambulance
- ‘in vitro’ fertilization (IVF).
- physiotherapy when referred by a practitioner
- physio type treatment carried out by a chiropractor, osteopath or bonesetter when referred by a practitioner
- Acupuncture qualifies for relief if it is carried out by a practitioner, such as your GP
- Non-routine dental expenses such as crowns, braces, root canal and bridges
- Treatment by a psychologist or psychotherapist once they are a practitioner
What you can’t claim for?
It is not possible to claim for expenses where you have been reimbursed for the costs. For example you had allowable medical expenses of €1500 and you got back €1200 from VHI then you can only claim the balance of €300 against your taxes. It is also not possible to claim relief for;
- cosmetic surgery such as rhinoplasty, breast augmentation or for botox
- routine dental expenses such as x-rays, fillings and extractions, cleaning and denture repairs
- routine eye care such as eye tests, glasses and contact lenses
However it can be possible to claim for cosmetic surgery as a result of a referral from a practitioner to correct an underlying health condition. In cases of doubt please contact your adviser or the local tax office.
The expenses we see most often are doctors, consultants and prescriptions costs. Some clients are in a good habit of getting all the receipts for these types of expenses. For prescriptions it is possible to claim up to €144 per month. This is where the medicines are prescribed by a medical practitioner. Any amounts in excess of that figure can be claimed from the local health office or use the website www.drugspayment.ie. It is not possible to claim for over the counter medicines as they are not purchased with a prescription. If you don’t have a receipt for all your prescriptions your friendly pharmacist should be able to provide you with a printout of all prescriptions for you and your family for a particular year.As advisors we don’t send receipts into the tax office but hold them on your file in the event of any Revenue enquiry into the claim. We do often get requests from Revenue to provide the back up for a claim especially when the claim is for a large amount so it is vital that you have or can get the receipts.
You can claim the cost of purchasing, repairing or maintaining a medical device once it is on the advice of a medical practitioner. Appliances on which relief can be claimed include the following;
- glucometer machines [measures blood sugar levels]
- hearing aids
- orthopaedic beds or chairs
- wheelchairs or wheelchair lifts
- exercise bicycles
- computers, if necessary to solve communication difficulties for a person with a severe disability
- false eyes
In the event of any doubt as to whether an appliance would qualify for tax relief, Revenue could request a medical certificate. This certificate would confirm the nature of the person’s illness, that the appliance was purchased on the practitioners advice and how the appliance helps treat the person’s ailment.
To claim relief for non-routine dental treatment you will need to get a form med 2 from your dental practitioner. This form will list the qualifying dental treatment that you had and the cost and date of the treatment. Again there is no need to send in the med 2 to Revenue, just hold onto it in the case of any review.
It is possible to claim for specific foods if you have an underlying medical condition such as those with diabetes having to follow a diabetic diet and coeliacs who have to follow a gluten free diet. You should have a letter from your doctor stating what specific dietary requirements you have and you can keep receipts from supermarkets, health stores and specialist food shops.
There are special rules in relation to children with permanent disabilities and life threatening illnesses and also specific rules for kidney patients that we will look at in a later blog.
For employees who are not required to file an Income Tax return form they can claim tax relief by filing an e-form 12 on their My Account while self-assessed taxpayers who have to file an Income Tax return can claim it on that form. It is possible to make a claim for the last four years and you are obliged to hold onto receipts for a period of 6 years
As always if you need to make a claim and you don’t want the hassle of doing it talk to your adviser or any of the team here.