CAMAF Member Option Guides & Info

Guide on the Determination of Medical Tax Credits

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Guide on the Determination of Medical Tax Credits (Issue 9) 8 Result: R Contributions paid to the medical scheme for the 2018 year of assessment: R2 500 × 10 25 000 MTC calculation Member and two dependants R606 + R204 = R810 per month R810 × 10 months = R8 100 maximum MTC rebate Tax due Normal tax on R95 000 (at 18%) 17 100 Less: Primary rebate (13 635) 3 465 Less: MTC (R8 100 limited to R3 465)* (3 465) Net normal tax due 0 * a rebate may not create a refund 3. Part B – Section 6B rebate (additional medical expenses tax credit) 3.1 Background The AMTC is a rebate against taxes payable and is, as a result, limited to the tax payable before the offset of employees' tax and provisional tax. The AMTC can accordingly not create a refund, nor can any excess be carried forward to the next year of assessment. All taxpayers (taxpayers under 65, taxpayers 65 years or older and taxpayers with a disability) could qualify to claim an AMTC, however, the extent to which these qualifying medical expenses can be taken into account to calculate the AMTC is different depending on the category within which a taxpayer falls, as explained in more detail below. A taxpayer who is 65 years of age or older may qualify for a portion of the AMTC to be taken into account through the monthly employees' tax system. See the paragraph headed "Employees' tax" in 3.6.1 for more detail. 3.2 Qualifying persons for whom expenses may be claimed The AMTC can be claimed by a person in respect of that person and any of his or her dependants as defined. 3.2.1 The meaning of "dependant" There are two definitions for the term "dependant", one of which applies in relation to the MTC, and the other which applies to the AMTC. When determining a "dependant" for purposes of the AMTC, the definition of dependant in section 1 of the MS Act as well as the definition of "dependant" in section 6B(1) will apply. 13 13 The definition of "dependant" in section 6B(1) also includes the definition of "dependant" as contained in section 1 of the MS Act.

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