Medical aid tax credits Frequently asked questions is the topic for week 4
Who is a Dependant?
A dependant is:
- A spouse (i.e. husband or wife)
- A child and the child of a spouse (e.g. son, daughter, step son, step daughter, adopted child)
- Who was alive during any portion of the year of assessment, and who on the last day of the year of assessment:
ØWas unmarried and was not or would not, had he or she lived, have been:
ØOlder than 18 years
Medical Aid Tax Credits
Thank you for joining us for the 3rd part in the Medical Aid Tax Credits Series.
How does it work?
Medical Scheme Fees Tax Credit will impact both the employer and the employee. This credit must be taken into account by the employer when calculating the amount of Employees’ Tax to be deducted from the employees’ remuneration.
Example 1 – Determination of MTC for the 2015 year of assessment
Welcome back to Week 2 of the Medical Aid Credits Series
What is Medical Scheme Fees Tax Credits?
- Medical Scheme Fees Tax Credits is a rebate which reduces the normal tax a person pays. This rebate is non-refundable and can’t be carried over to the next year of assessment.
- In other words, this rebate will reduce your normal tax to a lesser amount or nil, however it can’t create a negative amount.
- It applies for years of assessment starting on or after 1 March 2012 (from the 2013 year of assessment).
Who is it for?
Over the next few weeks Pay Solutions are going to discuss Medical Aid Credits, today we are looking at the background.
BACKGROUND OF MEDICAL AID CREDITS
As a rule, expenditure of a domestic or private nature is not deductible for tax purposes. However, an individual’s ability to pay tax may well be adversely affected by costs incurred as a result of illness or disability.
- For this reason, the Act provides a certain degree of relief for medical and physical impairment or disability expenditure paid by the taxpayer.