CAMAF Member Option Guides & Info

Guide on the Determination of Medical Tax Credits (Issue 9) 24 Formula to calculate AMTC: AMTC = 25% × {[A – (4 × B)] + C] – (7,5% × D)} = 25% × {[(R46 900 – (4 × R9 720)] + R21 923] – (7,5% × R324 000)} = 25% × [(R46 900 – R38 880) + R21 923] – R24 300 = 25% × (R29 943 – R24 300) = 25% × R5 643 = R1 410,75 Notes: 1. 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. Example 16 – Taxpayer under 65 with no disability Facts: During the 2018 year of assessment, X (aged 38) earned a salary of R280 000 (excluding any taxable benefit). X contributed R42 000 towards ABC Medical Aid Scheme. X's employer paid R18 000 of the R42 000. X's employer withheld employees' tax of R34 108 from X's remuneration of R298 000 (R280 000 + R18 000), after accounting for the MTC. All amounts were correctly reflected on X's IRP5 certificate, and X was not entitled to any exemption or deduction during the 2018 year of assessment. X is claiming allowable out-of-pocket medical expenses of R14 866. X has kept proof of all expenses. X is the main member on ABC Medical Aid Fund and has four dependants – a spouse and three children. Result: R Total contributions 42 000,00 MTC Calculation MTC: (R606 + R204 +R204 + R204) × 12 14 616,00 Calculation of tax liability Taxable income (R280 000 + R18 000) [Note 1] 298 000,00 Normal tax on R298 000 (as per tax tables) 62 362,60 Less: Primary rebate (13 635,00) 48 727,60 Less: MTC (14 616,00) 34 111,60 Less: AMTC (see calculation below) (nil) Net normal tax 34 111,60 Less: Employees' tax (34 108,00) Due by X 3,60

• 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