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An employee paying for a parent or spouse to live in an institution is entitled to an income tax credit
For more information, see the Tax Authority website

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  • If the spouse or parent of an employee is held in a special institution, the employee is entitled to a tax reduction from the amount he/she or his/her spouse paid for residence in the institution.
  • The credit is equal to 35% of the difference between the amount paid for the spouse/parent to live in the institution, and the obligatory 12.5% of income paid by the applicant.
Someone paid 60,000 NIS for his father to live in an institution. The son's taxable income is 160,000 NIS for that income tax year, so 12.5% of his income is 20,000 NIS (160,000 X 12.5%).

The deduction amount the son will receive for paying for his father residing in an institution:

35% X (60,000 - 20,000) = 14,000 NIS

Who is Eligible?

  • Those who have a spouse or parent who is completely paralyzed, permanently bedridden, blind, or not of sound mind.
  • The credit is conditional on the income of the individual in the institution not exceeding 166,000 NIS (as of January 2013), and the combined income of the individual and his/her spouse not exceeding 265,000 NIS (as of January 2013).

How to Claim It?

  • Those wanting to request a tax credit must contact the Tax Authority offices in their area. Click here to locate tax assessor offices according to location.
  • The following documents must be submitted with the request:
  1. Form 127 - Medical documentation that must include medical details and a clear and precise diagnosis in Hebrew, as well as indicate from which date the diagnosis is valid. The form must be filled out by a medical specialist (neurologist, developmental specialists, psychiatrist). The form may be downloaded here.
  2. Form 116 – Request for Tax Deduction Calculation Relief and Coordination
  3. Form 116a – Request for Tax Credit due to an Incapacitated Family Member - f the applicant is a salaried employee.
  4. Information verifying the identity of the person paying for the institutional arrangements and the tax credit applicant.
  5. Original invoices from the institution where the family member resides.
  6. Form 106 - The employee's total payments and deductions for a specific tax year.
  7. Form 1301 - Income report (submitted at the end of the year).

Please Note

  • The income tax credit request must be submitted every year.

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