CAMAF Member Option Guides & Info

Guide on the Determination of Medical Tax Credits (Issue 9) 18 "B" represents the MTC for the year of assessment; and "C" represents all qualifying medical expenses paid during the year of assessment. Example 13 – Calculation of AMTC for person who is 65 years of age or older Facts: For the 2018 year of assessment, AZ (aged 67) earned a pension of R215 000 (from which employees' tax of R19 592 was withheld) and annuity income of R42 000. AZ incurred and paid the following medical expenses: R3 100 per month for medical scheme contributions for AZ and AZ's spouse. R6 250 for out-of-pocket expenses relating to prescription items and visits to duly registered medical practitioners. R2 500 for spectacles (that were not covered by the medical scheme) for a physical impairment. R500 for medical consultation fees incurred to rush a friend to the emergency room following an accident (the friend is not a dependant of AZ). R280 for a consultation with a general practitioner on 20 February 2018. The amount was paid by AZ on 2 March 2018. All amounts were correctly reflected on AZ's IRP5, and AZ was not entitled to any exemption or deduction during the 2018 year of assessment. Result: R Total contributions (R3 100 × 12) 37 200,00 MTC calculation MTC: (R606) × 12 7 272,00 Calculation of tax liability Taxable income (R215 000 + R42 000) 257 000,00 Normal tax on R257 000 (as per tax tables) 51 629,20 Less: Primary rebate (13 635,00) 37 994,20 Less: Secondary rebate (7 479,00) 30 515,20 Less: MTC (section 6A rebate) (7 272,00) 23 243,20 Less: AMTC (section 6B rebate) (see calculation below) (8 036,62) Net normal tax 15 206,58 Less: Employees' tax (19 592,00) Due to AZ (4 385,42)

• Cover
• Preface
• Glossary
• 1. Background
• 2. Part A – Section 6A rebate (medical scheme fees tax credit)
• 2.1 Qualifying persons for whom contributions may be claimed
• 2.1.1 Meaning of a "dependant"
• 2.2 Person paying the contributions
• 2.2.1 Contributions paid by the taxpayer
• 2.2.2 Qualifying contributions
• 2.3 Medical scheme fees tax credit
• 2.4 Amount of medical scheme fees tax credit to be deducted from tax due
• 3. Part B – Section 6B rebate (additional medical expenses tax credit)
• 3.1 Background
• 3.2 Qualifying persons for whom expenses may be claimed
• 3.2.1 The meaning of "dependant"
• 3.2.2 The meaning of "spouse"
• 3.2.3 The meaning of "child" for purposes of the additional medical expenses tax credit
• 3.3 Qualifying medical expenses
• 3.3.1 Expenditure incurred inside the Republic
• 3.3.2 Expenditure incurred outside the Republic
• 3.3.3 Qualifying disability expenditure
• (a) Prescribed diagnostic criteria for a disability
• (b) Confirmation of disability (ITR-DD form)
• 3.3.4 Expenses relating to a physical impairment
• 3.4 Timing of claim for qualifying medical expenses
• 3.5 Contributions and qualifying medical expenses deemed to be paid by the taxpayer
• 3.6 Amount of additional medical expenses tax credit to be deducted from tax due
• 3.6.1 Taxpayers aged 65 years and older
• 3.6.2 Taxpayers with a disability
• 3.6.3 Taxpayers under the age of 65 without a disability
• 4. How to claim the medical scheme fees tax credit and additional medical expenses tax credit
• 4.1 Persons registered for income tax
• 4.2 Persons not registered for income tax
• 5. How to object to the disallowance of an medical scheme fees tax credit or additional medical expenses tax credit
• 6. Other information
• 6.1 Relief of customs and excise duty on a motor vehicle adapted for a physically disabled person
• Annexure A – The law
• Annexure B – The prescribed list of expenditure