What kind of work entitles you to the credit?
Amount of credit: work paid for in 2020
The maximum credit for household expenses that you can claim is €2,250 per person. The credit threshold per person is €100, which you have to pay yourself.
Credit is only granted for the part of the total expense that was paid for work. You can claim credit for 40% of the amount that you have paid a company for their work. You will receive the maximum amount of credit if the amount paid for the work specified in the company’s invoice is at least €5,875.
If you hired an employee, you can claim credit for 15% of the wages you paid them as well as the total amount of any employer’s contributions you have made.
Please note: You cannot get the credit for other costs, such as equipment or travel expenses. When the company sends you an invoice for the work, the invoice must include an itemisation of costs. The itemisation shows the work-related part of the total amount. You can claim credit for household expenses based on the work-related part.
Amount of credit: work paid for in 2021
The credit amount has not changed since 2020.
The credit for household expenses is personal. This means that you and your spouse together can get up to €4,500 of credit per year.
If your total amount of credit together is no more than €2,250, you can choose to claim the entire credit amount for just one of you. This way, you will only need to pay the credit threshold amount once.
If the amount claimed exceeds the maximum tax credit for one person but only one of the spouses claims the credit, then the Tax Administration will automatically transfer the exceeding part to the other spouse’s tax assessment.
Example: You and your spouse have ordered renovation work for your kitchen. You want to divide the tax credit for household expenses between yourselves. The sum total of the invoice is €13,000. The amount charged for work is €6,000.
Both of you submit the invoice total and the amount charged for work on your tax return. In addition, you both indicate what part of the expenses you have paid. In this case, you have paid €3,000 because you have divided the expenses between yourselves. The Tax Administration calculates the credit and subtracts the threshold amount on your behalf.
If you do not divide the credit but one of you claims the whole credit, the amount exceeds the maximum credit. In this case, the Tax Administration automatically transfers the exceeding part to the spouse’s tax assessment.
If the tax credit for household expenses is greater than your total taxes, the Tax Administration automatically subtracts the exceeding part from your spouse’s taxes.
An unmarried partner is equally entitled to the tax credit. To qualify for the credit, the partner must have paid expenses that entitle to the credit and must live in the same apartment. However, a tax credit can be transferred from one spouse to the other only when they are considered spouses from the point of view of taxation. Who are considered spouses in taxation?