Self-employed individuals may only deduct children's health insurance if age and cohabitation requirements are met

Professionals taxed under the direct estimation regime have the possibility of deducting health insurance premiums, but this deduction is not automatic for all members of the family unit. The regulations establish specific conditions that must occur simultaneously for the expense to be tax-deductible.

What the DGT has ruled

The Dirección General de Tributos (DGT) has clarified that, for children's health insurance premiums to be a deductible expense in income from economic activities, two mandatory requirements must be met:

• Age: Children must be under 25 years old.
• Cohabitation: Children must live with the taxpayer.

If both requirements are met, the regulations allow for the deduction of premiums paid by the taxpayer, their spouse, and their children. Regarding the amounts, the ruling establishes maximum deduction limits per person:

• 500 euros per person under general conditions.
• 1,500 euros per person in the event of a disability.

What this means for you

If you are self-employed and wish to include your children's health insurance premiums as business expenses, it is not enough to be the policyholder or for the children to have no income of their own. The tax administration will require proof that the beneficiaries meet the age limit and effective cohabitation at the taxpayer's residence. If any of these elements are missing, the expense will not be considered deductible in the Personal Income Tax (IRPF) return under the direct estimation regime.

What you should do

It is necessary to verify the cohabitation status and the age of the children before including these premiums as an expense in the economic activity. In situations where a disability exists, it is fundamental to have the documentation that proves such a condition in order to apply the higher deduction limit of 1,500 euros per person.