National Taxation Bureau of the Northern Area (NTBNA), Ministry of Finance, indicated that when taxpayers file individual income tax and claim itemized deductions for medical and maternity expenses incurred by themselves, their spouses, or dependents, any portion covered by insurance payments should be subtracted from the total expenses. Only the remaining balance after such subtraction may be claimed as a deduction.

NTBNA further explains that if a taxpayer elects to use itemized deductions and claims medical and maternity expenses for themselves, their spouse, or dependents, they must, pursuant to the proviso of Item 2-3, Subparagraph 2, Paragraph 1, Article 17 of the Income Tax Act, subtract the amount of insurance reimbursement received. The deduction should be reported based on the medical expenses remaining after the subtraction.

NTBNA provides the following example: Taxpayer Mr. A performed the filing of individual income tax for 2024 and claimed a deduction of NT$2 million for medical and maternity expenses. Out of this amount, NT$1.83 million was for the medical expenses of his spouse, Ms. B. Upon investigation, the Bureau found that Ms. B had received NT$1.43 million in insurance reimbursements for her medical expenses in 2024. According to the aforementioned Income Tax Act, the medical and maternity expense deduction Mr. A was entitled to claim for 2024 was NT$570,000 (= NT$2 million - NT$1.43 million in insurance payments). After recalculation, the Bureau issued a Notice for the Assessment of Individual Income Tax for an additional tax payment of NT$286,000 (= NT$1.43 million × 20% tax rate). Mr. A inquired about the reason for the additional tax, and after a detailed explanation from the Bureau, he paid the tax in full.

The Bureau would like to remind the public that for individual income tax cases where additional tax has been assessed, taxpayers will receive both a payment notice and a Notice for the Assessment of Individual Income Tax. On the last page of the Notice for the Assessment of Individual Income Tax, under the section “Reasons for Adjustment, Legal Basis, and Other Supplementary Matters,” there is a detailed explanation of the reasons for the additional tax, which the public may review on their own. If there are still any questions, please call the toll-free number 0800-000-321. The Bureau will assign a professional to provide a detailed explanation.

〔Contact person：Ms. Chiu, Section Head of Individual Income, Estate and Gift Tax Division.; Tel：(03)3396789, ext. 1430〕