Taipei: The Legislative Yuan has approved an amendment to increase the annual long-term care deduction from NT$120,000 (US$3,853) to NT$180,000, aiming to alleviate the financial burden on households supporting dependents in need of long-term care. The new regulation, passed on Tuesday, will be applied retroactively from January 1, 2025, and will become effective in tax filings starting May 2026.
According to Focus Taiwan, this amendment falls under Article 17 of the Income Tax Act, allowing taxpayers to claim the deduction for themselves, their spouses, or dependents recognized by the Ministry of Health and Welfare as needing long-term care due to physical or cognitive impairments. Lawmakers from various political parties had proposed increasing the deduction to amounts between NT$180,000 and NT$360,000, highlighting the challenges posed by Taiwan's aging population and escalating caregiving expenses. However, a consensus was eventually reached to set the deduction at NT$180,000.
During a Finance Committee review in August, Finance Minister Chuang Tsui-yun noted that the NT$120,000 deduction had remained unchanged since its introduction in 2018. Most legislators supported raising it to NT$180,000 to better reflect the financial demands associated with caregiving. Sung Hsiu-ling, director-general of the Finance Ministry's Taxation Administration, indicated that the increase would result in an annual tax revenue reduction of approximately NT$1 billion under the current eligibility criteria. However, the actual decrease is expected to be larger once the amendment's expanded eligibility criteria are implemented.
The Finance Ministry projects that around 350,000 taxpayers will benefit from this new measure, marking a significant step towards addressing the financial challenges faced by families involved in long-term caregiving.
