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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.
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:
- 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.
- Form 116 – Request for Tax Deduction Calculation Relief and Coordination
- Form 116a – Request for Tax Credit due to an Incapacitated Family Member - For Salaried Employees
- Information verifying the identity of the person paying for the institutional arrangements and the tax credit applicant.
- Original invoices from the institution where the family member resides.
- Form 106 - The employee's total payments and deductions for a specific tax year.
- Form 1301 - Income report (submitted at the end of the year).
- The income tax credit request must be submitted every year.
- Click here for a comprehensive listing of organizations that provide assistance for issues related to employment and workers' rights
Laws and Regulations
- Income Tax Ordinance - Section 44
- Tax Relief for Salaried Employees - The Tax Authority
- Original translation by AACI's Shira Pransky Project.
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