CAMAF Member Option Guides & Info

Guide on the Determination of Medical Tax Credits (Issue 9) 19 Calculation of AMTC A = R37 200 (contributions to a medical scheme) B = R7 272 (MTC) C = R8 750 (qualifying medical expenses of R6 250 + R2 500) [Note 1] Formula to calculate AMTC: AMTC = 33,3% × {[A – (3 × B)] + C} = 33,3% × {[R37 200 – (3 × R7 272)] + R8 750} = 33,3% × [(R37 200 – R21 816) + R8 750] = 33,3% × (R15 384 + R8 750) = 33,3% × R24 134 = R8 036,62 Notes: 1. The expense of R500 for the friend who had to be rushed to the emergency room is not a qualifying medical expense since the friend is not a dependant of AZ. The R280 paid for the consultation with a general practitioner will also not be considered a qualifying medical expense in the 2018 year of assessment since it was paid during the 2019 year of assessment, and can thus only be claimed in the 2019 year of assessment. Employees' tax A taxpayer who is 65 years of age or older may qualify to have a portion of the AMTC taken into account when calculating the employees' tax to be deducted from his or her remuneration. The taxpayer must be a member of a registered medical scheme and if the employer – (i) pays the medical scheme contributions directly, the employer is required to take the qualifying portion of the AMTC into account; 31 or (ii) does not pay the medical scheme contributions directly, the employer may take the qualifying portion of the AMTC into account, if the taxpayer has provided proof of payment of the contributions. 32 The portion of the AMTC that qualifies to be taken into account in calculating the employees' tax to be deducted, is the portion that relates to the "excess contributions", calculated as follows: 33 33,3% of the fees paid to a medical scheme or qualifying foreign fund as exceeds three times the amount of the MTC 34 to which that person is entitled. 31 Paragraph 9(6)(b)(i) of the Fourth Schedule to the Act. 32 Paragraph 9(6)(b)(ii) of the Fourth Schedule to the Act. 33 Section 6B(3)(a)(i). 34 Section 6A(2)(b).

• 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