Guide on the Determination of Medical tax Credits

On 17 June 2022, SARS published the updated version of the Guide on the Determination of Medical Tax Credits (Issue 14). The guide provides general guidelines regarding the medical scheme fees tax credit (MTC) and additional medical expenses tax credit (AMTC) for income tax purposes. The guide applies from years of assessment commencing on or after 1 March 2021.

Only contributions that were paid to a registered medical scheme, and that can be proven to have been paid by a taxpayer, either directly or indirectly, will qualify in determining the MTC under section 6A of the Income Tax Act, No. 58 of 1962 (the Act). The MTC is set at a fixed amount per month.

Taxpayers can also claim an AMTC under section 6B, to the extent that the qualifying medical expenses can be considered in the calculation of the AMTC. Expenditure prescribed by the Commissioner, and which is necessarily incurred and paid for by the taxpayer in consequence of a disability, also qualifies for an AMTC. These expenses are set out in the List of Qualifying Physical Impairment or Disability Expenditure with effect from 1 March 2020.

Taxpayers are also permitted to claim qualifying medical expenses for a physical impairment in calculating the AMTC. Qualifying medical expenses can only be claimed in the year of assessment during which they are actually paid.