Special tax deduction for a reduced capacity to pay taxes
You can claim a special deduction for a reduced capacity to pay taxes because of an illness, or because of unemployment, a child-maintenance obligation, etc.
The maximum deduction is €1,400. The Tax Administration will round up the actual deductible amount to even hundreds.
The total income of all family members affects the deduction
Whether or not the special deduction can be given to you depends on
- how much annual income you receive – including any tax-exempt income, and
- how much income and property the other members of your family receive or have (your spouse’s and your children’s income and wealth).
For the above reasons, the special deduction cannot be included in your tax-card calculation so that it would reduce your withholding rate. You need to submit an application for this deduction when you send back your pre-completed tax return.
Note: you do not qualify for the deduction if your annual gross income exceeds €27,000 – or if the combined income of yourself and your spouse exceeds €40,000. You can only get a partial deduction if your annual gross income exceeds €17,500 – or if the combined income of yourself and your spouse exceeds €26,500.
However, you can add €2,500 to the above thresholds for every child you have in your care and custody. See here for more information: who is regarded as a spouse.
In certain situations, although the thresholds (€27,000/€40,000) are exceeded, the authorities may still make a decision to give the special deduction to your due to high medical expenses. Each case is decided separately.
Deduction based on medical and pharmacy costs
Under the following two conditions, you can be given the special deduction (from €500 to €1,400 according to a standard calculation formula) because of high medical and pharmacy costs alone:
- annual cost is at least €700 for you and family members combined, and
- it also reaches 10% in proportion to your taxable annual earned + capital income (= all income minus deductions for the production of income).
Even if you satisfy both of the 2 conditions (€700 and 10%), the decision whether to give the special deduction to you is always based on an evaluation of your and your family’s disposable income and the property and assets that you own.
This means you cannot claim a tax deduction although you have had to pay medical costs because they are not a deductible item in tax assessment. The amount that can be deducted is the result of standard calculations by formula, and both the size of the medical expenses and the amounts of annual gross income are accounted for.
Standard formula-based deduction due to high medical costs
Please note that if your income exceeds €27,000 – or €40,000 for you and your spouse – none of the standard amounts appearing in the table below will apply. Instead, the deduction would be based on an appraisal of the taxpayer’s circumstances, and each case is decided separately. Note the maximum limits for proportions 18% and 20% of paid medical costs/annual income.
Amount of deduction, annual income of one person
| Your family’s medical cost is at least ×% of your income: | Your max. income | Deduction |
|---|---|---|
| 10% | €27,000 | €500 |
| 12% | €27,000 | €700 |
| 14% | €27,000 | €900 |
| 16% | €27,000 | €1,000 |
| 18% | €23,500 | €1,200 |
| 20% | €17,500 | €1,400 |
Amount of deduction, combined annual income of 2 spouses
| Your family’s medical cost is at least ×% of the combined income: | The spouses’ max. income | Deduction |
|---|---|---|
| 6.0% | €40,000 | €500 |
| 7,5% | €40,000 | €700 |
| 9.0% | €40,000 | €900 |
| 10,5% | €40,000 | €1,000 |
| 12.0% | €35,000 | €1,200 |
| 14.0% | €26,500 | €1,400 |
Example: Robert lives alone. Over the course of 2024, his medical costs were €3,000. Robert’s taxable earned income plus capital income reached €20,000. The proportion between income and medical costs is €3000/€20000 = 15%. The special deduction for reduced capacity to pay taxes is granted to Robert, and the deductible amount is €900, which in tax assessment gets subtracted from Robert’s earned income before any other tax computations. He must apply for the deduction himself when he submits his 2024 tax return.
For further information on the deduction for reduced capacity to pay taxes, see the Tax Administration’s detailed guidance (in Finnish and Swedish, link to Finnish).
How to claim
You can apply for the special deduction for the year 2024 on your tax return that you complete in the spring of 2025. Keep the receipts for medical, pharmaceutical, other sickness costs, etc. Do not enclose any receipts with your tax return. If it turns out to be necessary, the Tax Administration will ask you to show the receipts later.
Alternatively, submit the information on paper with Form 50A — Earned income and deductions. Claiming the deductibe expenses on paper
How does this affect my tax assessment?
The special deduction is directed toward the income you have earned during the tax year. This means that the deducted amount of money will not reduce your taxes – instead, it reduces the amount of taxable earned income you have.
For example, if you are entitled to deduct €900, it does not mean that the year’s taxes would be reduced by €900 for you.