CAMAF Member Option Guides & Info

Guide on the Determination of Medical Tax Credits (Issue 9) 21 Result: R MTC (R606 + R204) × 12 9 720,00 Tax liability Income (R280 000 + R24 000) [Note 2] 304 000,00 Taxable income 304 000,00 Normal tax on R304 000 (as per tax tables) 64 222,60 Less: Primary rebate [section 6(2)(a)] (13 635,00) 50 587,60 Less: MTC [section 6A(2)] (9 720,00) 40 867,60 Less: AMTC [section 6B(3)(b)] (see calculation below) (19 867,77) Net normal tax 20 999,83 Less: Employees' tax (40 864,00) Due to Y (19 864,17) Calculation of AMTC A = R46 900 (contributions to a medical aid or fund) B = R9 720 (MTC) C = R41 923 (qualifying medical expenses of R32 691 + R9 232) Formula to calculate AMTC: AMTC = 33,3% × {[A – (3 × B)] + C} = 33,3% × [R46 900 – (3 × R9 720)] + R41 923 = 33,3% × [R46 900 – R29 160] + R41 923 = 33,3% × (R17 740 + R41 923) = 33,3% × R59 663 = R19 867,77 Notes: 1. The payment for the two hearing aids will be a qualifying medical expense since the amount was necessarily incurred and paid for the taxpayer's child in consequence of the child's physical disability. 2. The amount of R24 000 paid by the employer for the employee's benefit represents a taxable benefit under paragraph 2(j), read with paragraph 12B. This amount must be included in gross income.

• 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