Set your reminders - tax season is here!
It is time to take stock of your finances and prepare your tax computation. One thing to check is your eligibility for personal income tax reliefs, as they can significantly reduce your tax and maximise your savings.
Caregivers, defined as those who are responsible for someone unable to care for himself or herself, might be able to find relief in some of the tax deductions available to them.
According to a survey of 200 family caregivers of Dover Park Hospice home and day care patients, the average caregiver in Singapore spends about seven hours on caregiving per day after work, which can be mentally draining. It was also found that four in 10 of those surveyed are at risk of depression.
Given the challenges, they need all the help they can. If you are a caregiver, here’s a quick guide on the various tax reliefs you may be eligible for.
Respite for parents
Having a kid is not an easy task as apart from the emotional and physical demands, parents may need to set aside $200,000 to $1 million to welcome the stork. To defray some of these costs, take advantage of the tax reliefs available to you.
If your child or step-child – including adopted children – is below the age of 16 and does not have an annual income exceeding $4,000 in 2023, you are entitled to the Qualifying Child Relief (QCR) of $4,000. You would also be eligible if they are studying full-time at any educational institution at any time in the year, despite being above the age requirement.
Those with mentally or physically handicapped children are entitled to up to $7,500 in tax relief through the Handicapped Child Relief (HCR), which does not put limits on the annual income or age of the child.
These reliefs can be split among both parents. In addition, if you are a working mother, you can also claim the Working Mother’s Child Relief (WMCR). The exact amount is calculated by matching a percentage of your earned income to the number of children you have. More specifically, you can claim 15 per cent on your first child, 20 per cent on your second and 25 per cent on your third and beyond.
The maximum amount claimable per child from QCR, HCR and WMCR is capped at $50,000.
Relief for children caring for their parents
Given Singapore’s ageing society, a growing number of working Singaporeans will find themselves taking on caregiving duties for their elderly parents.
If you are one of them, you can tap on the Parent Relief. To qualify, the parent or parent-in-law you are supporting needs to be 55 years old or above, and not have an annual income of more than $4,000.
They would also need to reside in Singapore. But if they live in a separate household, you must have incurred $2,000 or more in supporting them to be eligible for the relief. The amount you can claim will be higher if they live with you.
As in the case of the Handicapped Child Relief, you will be able to claim more with the Handicapped Parent Relief regardless of your dependent’s age or annual income if he or she is mentally or physically disabled.
So as the tax season approaches, remember to explore the available reliefs that can take some load off your shoulders.
the bottom line:
Tax reliefs are one way caregivers can receive support for their efforts. Be sure to assess your eligibility every year to ensure you do not miss out.
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