Tax Season 2021 – Medical Tax Credits

Taxpayers are entitled to two medical credits:

  1. A credit on contributions made to your medical aid (Medical Scheme Fees Tax Credit); and
  2. A credit on additional medical expenses you paid that were not covered by your medical aid. This is called qualifying out-of-pocket medical expenses (Additional Medical Expense Tax Credit).

Medical Scheme Fees Tax Credit (MTC)

If you are a medical aid member, SARS grants you a monthly tax credit. The MTC is calculated for every month of your membership during the relevant tax year. For the 2021 Tax Year (being the period from 1 March 2020 – 28 February 2021) it is calculated as follows:

  • R319 per month for the taxpayer who paid the medical scheme contributions (you get this credit even if your employer pays the contributions on your behalf); and
  • An additional R319 per month for the first dependant; and
  • An additional R215 per month for each additional dependant.

Additional Medical Expense Tax Credit (AMTC)

The AMTC is a rebate that reduces the tax payable by the taxpayer. It is mostly calculated against qualifying out-of-pocket medical expenses paid by you or any dependant. The credit is handled as a rebate to reduce your normal taxation. The AMTC is additional to the MTC and can be claimed irrespective if you are a member of a medical aid.

To claim the AMTC it is important to keep all the slips and invoices of your additional medical expenses as proof. 

Calculation of AMTC works as follows: 

If you are under 65 (without disability):

You are able to claim 25% of:

  • Total contributions paid to the medical scheme
  • Less (4 x medical scheme fees credit)
  • Plus (qualifying medical expenses paid less 7.5% of taxable income)

If you are under 65 (with disability):

You are able to claim 33.3% of:

  • Total contributions paid to the medical scheme
  • Less (3 x medical scheme fees credit)
  • Plus (qualifying medical expenses paid)

If you are 65 or over (with or without disability):

You are able to claim 33.3% of:

  • Total contributions paid to the medical scheme
  • Less (3 x medical scheme fees credit)
  • Plus (qualifying medical expenses paid)
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