Revenue Note for Guidance

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Revenue Note for Guidance

467 Employed person taking care of incapacitated individual

Summary

This section provides for a deduction from total income for family members who employ a carer to look after an incapacitated relative. Tax relief is available in respect of expenditure up to €75,000 (€50,000 prior to 1 January 2015) in each case of an incapacitated person. Where two or more persons employ the carer, the allowance of €75,000 is apportioned between them. Carers may be employed on an individual basis or through an agency.

Details

Definition

(1)qualifying individual”, in relation to an individual, includes a relative, a civil partner or a relative of a spouse or civil partner.

relative” includes, in addition to the usual persons covered by the term relative (namely, blood relations), a civil partner, a relation by marriage or civil partnership and a person in respect of whom the individual is and was the legal guardian.

The relief

(2) Where an individual proves, for a year of assessment—

  • that, throughout the year of assessment, he/she or his/her relative was totally incapacitated by physical or mental infirmity, and
  • that, for the year of assessment, the individual or, where a couple are jointly assessed under section 1017 or 1031C, the individual’s spouse or civil partner has employed a person, either on an individual basis or through an agency, to take care of the incapacitated person,

then the individual, in computing taxable income is entitled to a deduction from total income of the lesser of €75,000 and the cost of the care in respect of each such incapacitated person.

(2A) The relief may be granted in the first year in which the individual proves that the person becomes incapacitated provided all other conditions of the section are met

(3) Where two or more individuals are, under this section, entitled to a deduction in respect of the same incapacitated person, the total of the deductions granted to the individuals cannot exceed €75,000. Also, the deduction of €75,000 is apportioned between the individuals in proportion to the amounts borne by each individual in employing the carer.

(4) Where a deduction is allowed under this section, the claimant is not entitled to either the incapacitated child tax credit (section 465) or the dependent relative tax credit (section 466) in respect of the carer.

Relevant Date: Finance Act 2020