Tax and Disability

  • Criteria for being considered a person with disability
    • The disability must first be diagnosed by a duly registered medical professional qualified to express an opinion thereon
      • This is completed on an ITR-DD form
      • Part A is completed by the taxpayer
      • Part B and C is to be completed by the medical professional
      • The form will indicate whether you, your spouse or child has a moderate to severe disability. These include sensory, communication, physical, intellectual or mental impairments which have lasted or have a prognosis of more than a year.
      • If the taxpayer who or whose spouse of child has a permanent disability the ITR-DD form only needs to be completed every 5 years.
      • This form is not submitted with the annual tax return (ITR12) of the taxpayer but rather is retained in the event of a SARS audit
    • What are the benefits for a person with a disability?
      • 33.3% of all qualifying out-of-pocket medical expenses, which include disability related expenses, paid during the relevant year of assessment can be deducted
        • SARS has prescribed a list of qualifying expenses
        • The deductible expenses should be directly related to the disability
        • The deductible expenses were paid during the year of assessment. Expenses incurred and not paid for will be carried forward to the following year of assessment.
        • Available to those with a moderate to severe disability
        • Physically impaired persons with a less than moderate to severe disabilities have further limitations meaning that they may not automatically qualify for the 33.3% concession
        • Over the counter medication is not regarded as a “qualifying medical expense” as it is not prescribed by a duly registered medical practitioner, however, if it prescribed by the Commissioner in consequence of a physical impairment as per the list of qualifying expenses then it will be allowed
      • Medical scheme fees tax credits are also available to the taxpayer (limited to tax payable; these do not create a refund as they are a rebate; nor can they be carried to the following year of assessment if no tax has been paid)
    • How to claim for the disability benefit
      • These benefits are claimed when the taxpayers submits their annual income tax return (ITR12)

For more information, contact ERH Accountants.