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Thread: Medical Aid Tax Credit disallowed

  1. #1
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    Medical Aid Tax Credit disallowed

    Hi,
    Wonder if someone could give me some advice. Submitted tax return and received a ITA34 showing a refund of +/-R43000. I was asked to submit documentation for review which I did. I have subsequently received a ITA34 showing that I must pay in +/- R6000. Leaving a credit balance. On closer inspection I have noticed that they have reduced the original Medical Tax Credit from R9216 to R2760, hence the R6000 payment required.
    In the 2013 tax year I paid 11 months medical aid payments directly to medical aid. In the 12th month the company deducted the payments from my salary. On the IRP5 they show the months deduction under code 4005 and tax credits of R768.00. I inputted the remaining contributions under the code 4040.
    One other thing I noticed was that on the original ITA34 they had the figures for the medical aid contributions which were submitted directly from Discovery showing the full years contribution. On the subsequent ITA34 they only have the figures from the IRP5 showing as Deductions allowed(being one months contribution).

    As far as I understand I am entitled to claim a total on R9264 tax credits ( family of 4).
    Am I correct and how would I go about correcting this?

    Thanks

  2. #2
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    The tax credit you are allowed to deduct at the bottom right below the primary rebate, is calculated as follows:

    Per month:
    1st member 230.00
    2nd member 230.00
    3rd member 154.00
    4th member 154.00
    Total per month 768 x 11 months (amount of months contributed to a medical aid fund) = 8448

    Did you remember to indicate the amount of members per month on the return?

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