Payments for care provided in the home

Providing care in the home means that an individual takes responsibility for the care or accommodation of others in their own home in return for payment. Such payments are generally taxable income, but deductions may be permitted. The tax treatment depends on the nature of the care provided, its scope, and whether the activity is considered a business operation or not.

Day care in private home

Payments received by childminders for providing childcare in their home are considered business income. Documented expenses related to the activity may be deducted, such as food, toys, and a proportion of housing costs. Instead of itemizing expenses, it is permitted to use the maximum deduction according to the tax assessment guidelines.

Summer care for children

Income from providing summer care for children in the home is considered taxable business income. It is permitted to deduct documented expenses or apply the maximum deduction according to the tax assessment guidelines.

Foster children

Payments received for the care of foster children are considered taxable income.

If the activity is regular, the income must be reported as business income, and documented expenses related to the activity may be deducted.

If the activity is not regular, deductions may be claimed in one of the following ways:

• documented expenses directly related to these payments,

• a deduction equal to double the child pension for the relevant year for each child, or

• the child maintenance payment, if it is specified in an agreement between the municipality and the taxpayer that the amount is higher than twice the child pension.

Foster care payments are always considered taxable income without deduction if they are paid as wages.

Further details on the rules regarding foster children, as well as information on the child pension, can be found in the tax assessment guidelines.

Support families

Payments received by support families for providing care for children are considered taxable income. Direct, documented expenses related to the stay and care may be deducted. It is also permitted to apply the maximum deduction according to the tax assessment guidelines.

Care of elderly or disabled persons

Income received for providing care for elderly or disabled persons is considered taxable income.

Income from regular activities involving the care of elderly or disabled persons must be reported as business income, and documented expenses related to the activity may be deducted.

If the activity is not considered a business operation, it is permitted to claim a deduction of up to twice the basic old-age pension, but never exceeding the amount of the income itself.

Further details on the rules regarding the care of elderly and disabled persons, as well as information on the basic old-age pension, can be found in the tax assessment guidelines.

It is important to keep records of agreements, payment statements, and documentation supporting any deductions. The correct classification of income and deductions may affect the tax liability.