Medical Aid Tax Credits for 2020 and 2021

medical aid tax credits

As of the 2013 tax year, SARS introduced a new fixed-fee rebates system relating to qualifying medical expenses.

In the past, medical aid contributions and out-of-pocket medical costs were deducted from taxable income.

Now, taxpayers are eligible for two types of medical aid credits that are automatically deducted from payable tax.

What is the medical scheme fees tax credit?

The medical scheme fees tax credit (MTC) is a non-refundable rebate that applies to the taxpayer’s contributions to a registered medical aid scheme in South Africa.

It’s a fixed monthly amount that increases according to the number of dependants.

2019/2020 medical tax credit rates

In the 2019/2020 tax year, the following medical tax credits apply:

  • R310 per month for the taxpayer and main member of the scheme
  • R310 per month for the first dependant
  • R209 per month for each additional dependant.

2020/2021 medical tax credit rates

The MTC has been adjusted for the 2020/2021 tax year, as follows:

  • R319 per month for the taxpayer and main member of the scheme
  • R319 per month for the first dependant
  • R215 per month for each additional dependant.

Taxpayers can only claim medical tax credits for the months in which they, and their dependants, are medical aid scheme members.

Additional medical expenses tax credit

The second type of medical tax credit is the additional medical expenses tax credit (AMTC).

It’s also in the form of a tax deduction and covers a portion of all qualifying out-of-pocket medical expenses.

How to get tax credit you’re owed

How you get your medical tax credit depends on your status as a taxpayer.

When you’re permanently employed, pay tax on a PAYE basis and your medical aid contributions are processed by the company, the responsibility lies with your employer to deduct the rebate from your monthly tax liability.

Provisional tax payers, who pay for their own medical aid contributions, enter the medical tax credit, as a rebate, on their annual income tax return.

How IFC can help you?

If you’re not a member of a medical aid scheme in South Africa, you won’t get the benefit of medical tax credits.

At IFC, we offer informed, objective advice about South African medical aid schemes and how medical tax credits could benefit you.

Call IFC on 021 593 3012 and one of our consultants will help you find the right medical aid, at the right price.

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