Deductible Healthcare Expenses 2024: Should You Use Cash or Card? A Case-by-Case Payment Guide
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Healthcare Expenses Deductions: Payment Methods for Tax Deductions
The tax declaration season is in full swing.
Those filing the 730 form have just over a month left to submit their declarations.
On the other hand, for those using the Redditi model, the deadline is set for October 31.
Concerning deductions for medical and healthcare expenses, the regulations remain unchanged compared to the previous year.
The requirement to pay deductible healthcare expenses through traceable payment methods does not apply to every medical cost, but only in certain situations.
For some healthcare expenses, taxpayers may still enjoy tax benefits even when paying in cash.
Understanding Payment Methods for Tax Deductions
From January 1, 2020, it is mandatory to use traceable payment methods for the expenses listed under Article 15 of the TUIR, with particular exceptions.
The rule to pay via debit cards and other traceable methods does not apply to the deduction of medications and medical devices.
Instead, a dual pathway was introduced for deductible healthcare expenses.
Cash payments remain an option for expenses related to services provided by public and private accredited facilities with the National Health Service (SSN).
However, the card and debit card payment requirement applies only to deductibles paid to private doctors and non-contracted specialists.
This includes expenses incurred for psychologists, dentists, or ophthalmologists who are not accredited with the SSN.
In these instances, using traceable payment methods is crucial for tax deduction eligibility.
Type of Medical Expense and Payment Method
| Type of Expense | Payment Method |
|---|---|
| Medications | Both debit card and cash |
| Medical Devices (glasses, orthopedic products, etc.) | Both debit card and cash |
| Medical Visits at Public Facilities | Both debit card and cash |
| Medical Visits at Private Accredited Facilities | Both debit card and cash |
| Medical Visits at Non-accredited Private Facilities | Only debit card, card, or bank transfers |
| Hospitalization or Interventions at Non-accredited Private Facilities | Only debit card, card, or bank transfers |
| Blood Tests at Non-accredited Private Facilities | Only debit card, card, or bank transfers |
Deductions Based on the Service Provider
Beginning April 30, 2024, the Revenue Agency will provide taxpayers with the pre-filled 730 form for 2024.
As usual, deductible medical and healthcare expenses will be included in the revenue declaration metrics, allowing room for taxpayer modifications and corrections.
The distinction between debit card and cash payments relies on the service provider, not the nature of the service.
Thus, the critical factor is whether the service provider is part of the SSN.
Tax Recovery from Medical Expenses
Taxpayers can deduct 19% of medical expenses exceeding a deductible threshold of €129.11.
For example, a taxpayer who spends €735 on medications and visits can deduct 19% of €605.89, resulting in a recovery of €115.11.
If expenses surpass €15,493.71 annually, taxpayers can divide the deduction into four equal installments.
The choice to either divide or apply the deduction in a lump sum should be made based on the taxpayer’s fiscal capacity when filing their tax return.
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