Tax relief for medical fees
Relief is given by a repayment of Income Tax paid and claims for earlier years are limited to the last 4 years.
The tax relief is only at the 20% rate unless it is for nursing home expenses which can be at the 41% rate, assuming the person has paid tax at the top rate.
There is now no requirement that the person for whom the medical expenses were paid should be a relative nor is there any requirement that the medical treatment be in Ireland.
Routine Dental and Sight treatment is excluded and also excluded is Cosmetic Surgery. The range of medical services that do qualify is very wide. Most claims will relate to fees for doctors and consultants, chemist bills and treatment in hospitals or clinics. IVF treatment and maternity care are included as is speech and language therapy for children and educational psychological assessment.
Expenditure incurred on the advice of a doctor on many items will be tax allowable e.g. hearing aids, exercise bicycle, wheelchair, orthopaedic bed and chair, glucometer machine and wigs.
Dental Expenses can be more complex to claim for but generally a dentist will, on request, give the patient a MED 2 Form which states the date of the treatment and the cost. This will be accepted by Revenue as the dentist has guidelines from Revenue on the types of treatments which are allowable e.g. dental bridges, crowns and root canal treatment.
Where a Health Insurer, such as VHI, pays a part of the cost of the treatment then a taxpayer is entitled to claim tax relief on the part of the expenses that the taxpayer paid himself.
Claims are made on a Form MED 1, available to download from the Revenue website www.revenue.ie. Basic details, such as your name and address, PPS Number and the year of claim, have to be completed on the Form.
Sample Claim Form MED 1:
Expenditure on Medical Practitioners: €500
Expenditure on Drugs: €400
Less Amount paid by Insurer: €300
Net Claim: €600
The taxpayer is then entitled to a refund of Income Tax of €600 @ 20% or €120.
If you have not submitted a Tax Return for some time then Revenue may, depending on the nature of your occupation, request you to send in a Tax Return even though you have submitted a MED 1. So, a claim for medical expenses may trigger a request for a Tax Return. This should not stop people from making a claim as Revenue will probably, sooner or later, request a Tax Return anyway.
It is not necessary to send in the receipts for medical expenses with the MED 1 but you should have them available if requested. My experience suggests that Revenue often asks for receipts where expenditure exceeds €2,500 per annum.