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Deducting childcare costs or support for a dependent parent: what Luxembourg law says
Crèche fees, maison relais, caring for an elderly parent: find out what you can actually deduct from your taxes in Luxembourg and how to claim it.
In Luxembourg, certain costs related to childcare or supporting a dependent parent can be deducted from taxable income. However, these tax benefits are often misunderstood. Here's what the law actually allows and how to benefit from it.
1. Childcare costs: what's deductible
Parents who use childcare can, under certain conditions, deduct some of these expenses from their taxable income.
Types of eligible expenses
The following childcare costs can be taken into account:
- Crèche
- Day nursery
- Maison relais (after-school care)
- Home care by a registered childminder (Tageseltern)
Deductible amount
The law sets an annual limit of €5,400 per child, or €450 per month.
Conditions to meet
- The child must be your tax dependent
- The expenses must be actually incurred and supported by invoices
- The care must be provided by a registered person or organisation
Important
Childcare costs paid to a family member (grandparents, uncle, aunt) are generally not deductible, unless that person is a registered childminder.
This deduction reduces your taxable base and therefore lowers the amount of tax you pay.
2. Supporting a dependent parent: what the law provides
Luxembourg also takes into account the financial burden of supporting an elderly or dependent parent. A specific deduction may apply under extraordinary expenses.
Who's eligible?
Parents, grandparents or other direct ascendants who are:
- living with the taxpayer, or
- financially dependent on them
How does the deduction work?
The tax authorities first calculate a "normal burden" based on your situation and income. Only the portion of expenses exceeding this normal burden is deductible.
Calculation example
A couple has an estimated "normal burden" of €10,000. They supported a dependent parent for a total of €15,000 over the year. Only the difference, €5,000, can be deducted for tax purposes.
Conditions to meet
- The person being supported must be legally dependent or have needs requiring support
- The expenses incurred must be documented (housing, care, daily assistance, etc.)
- The costs must be actually paid by the taxpayer
Documentation required
This deduction requires precise documentation, often accompanied by a medical or administrative certificate proving dependency. Keep all your documents!
3. Practical tips to maximise your deductions
To take full advantage of these tax benefits:
Keep all your invoices and receipts: crèche certificates, maison relais statements, home care invoices, proof of transfers for parental support.
Check eligibility: make sure the childcare provider is registered and that the person being supported meets the legal dependency criteria.
Separate the types of expenses: childcare costs and support for a dependent parent are two distinct categories with different rules and limits.
taxx.lu advantage
On taxx.lu, the deductible limits for extraordinary expenses are calculated automatically based on the income you enter.
Conclusion
Deducting childcare costs or support for a dependent parent can provide a real tax advantage. However, these deductions are strictly regulated by law and require thorough documentation.
By understanding the limits, conditions and required supporting documents, you can reduce your tax burden while meeting your family's needs.
