A colleague of mine has been experiencing problems up to now claiming medical deductions from SARS for her son that has Asperger’s Syndrome. She had submitted her 2009 ITR12 income tax return form using the SARS e-filing system and a few days later she received an SMS from SARS indicating that they had refunded her some (no, lots) of money due to her child’s “handicap”.
Since then she has been asked by numerous people how she did it – and she has asked me to write an article so that others can also benefit from her experience…
She started by reading the ASCON (Asperger's Connections Support Group) web site here: http://www.cs.sun.ac.za/aspergers/bin/view/Main/FinancialInfo
There’s an explanation of the tax laws and the definition of a “mental illness”.
There’s a good explanation of what’s allowed as a deduction and there are (SARS and Acts) documents that can be downloaded.
Most importantly, there’s an example letter/medical report that you need to obtain from your child’s psychologist or mental health care practitioner referring to the correct Acts (you need to get this letter every year).
The info below is extracted directly from the Ascon web site (with thanks):
“Claims can include: occupational therapy, speech therapy, medication, school fees (if your child attends a "special school" e.g. Vista Nova, Pro-Ed, etc.), transportation costs to take your child to the special school, tutor/facilitator fees.
Note: school uniforms cannot be claimed (since those would have been needed even if your child wasn't handicapped).
The rule of thumb is "anything you would not have had to spend on an NT dependent, is deductible".
Things do become hazy when you'd want to claim back for computer expenses, private schools, and so on. However, for anything that you have a supporting letter from a certified professional, you can claim. For example, if the OT writes a formal letter that the child should do horse riding, it is deductible. Without the letter, it is not.
Rule of thumb: if you can substantiate expenses that you would not have incurred if you didn't have a handicapped person in your family, then you can claim it. But when asked about claiming back cost of books, courses and conferences, there was some uncertainty. So these items seem to be a gray area.
SARS efiling: What to do.... and where to find that field that will tell SARS how much you've spent on your dependant's medical expenses.
It's easiest to register for efiling: http://www.sarsefiling.co.za/ and submit your returns electronically.
Then fill in your Income Tax Return form (ITR12) online,
and on the section called "Medical Deductions" there’s a section that asks for the number of “members per month” MEDIF01.
Mark the ‘Y’ box next to “Are you, your spouse or any of your qualifying children considered to be handicapped?”
Fill in field 4020 for “normal” expenses that are not covered by your medical aid – that’s usually covered by the medical aid’s “Tax certificate”.
Below that, you will find a field labelled "Handicap expenses (not recovered from your medical aid)" with code "4023":
Since then she has been asked by numerous people how she did it – and she has asked me to write an article so that others can also benefit from her experience…
She started by reading the ASCON (Asperger's Connections Support Group) web site here: http://www.cs.sun.ac.za/aspergers/bin/view/Main/FinancialInfo
There’s an explanation of the tax laws and the definition of a “mental illness”. There’s a good explanation of what’s allowed as a deduction and there are (SARS and Acts) documents that can be downloaded.
Most importantly, there’s an example letter/medical report that you need to obtain from your child’s psychologist or mental health care practitioner referring to the correct Acts (you need to get this letter every year).
The info below is extracted directly from the Ascon web site (with thanks):
“Claims can include: occupational therapy, speech therapy, medication, school fees (if your child attends a "special school" e.g. Vista Nova, Pro-Ed, etc.), transportation costs to take your child to the special school, tutor/facilitator fees.
Note: school uniforms cannot be claimed (since those would have been needed even if your child wasn't handicapped).
The rule of thumb is "anything you would not have had to spend on an NT dependent, is deductible".
Things do become hazy when you'd want to claim back for computer expenses, private schools, and so on. However, for anything that you have a supporting letter from a certified professional, you can claim. For example, if the OT writes a formal letter that the child should do horse riding, it is deductible. Without the letter, it is not.
Rule of thumb: if you can substantiate expenses that you would not have incurred if you didn't have a handicapped person in your family, then you can claim it. But when asked about claiming back cost of books, courses and conferences, there was some uncertainty. So these items seem to be a gray area.
SARS efiling: What to do.... and where to find that field that will tell SARS how much you've spent on your dependant's medical expenses.
It's easiest to register for efiling: http://www.sarsefiling.co.za/ and submit your returns electronically.
Then fill in your Income Tax Return form (ITR12) online,
and on the section called "Medical Deductions" there’s a section that asks for the number of “members per month” MEDIF01.
Mark the ‘Y’ box next to “Are you, your spouse or any of your qualifying children considered to be handicapped?”
Fill in field 4020 for “normal” expenses that are not covered by your medical aid – that’s usually covered by the medical aid’s “Tax certificate”.
Below that, you will find a field labelled "Handicap expenses (not recovered from your medical aid)" with code "4023":
This is where you fill in the amount that you've spent on your dependant's medical expenses - this is the amount that you are asking SARS to consider as a deduction. {Yes, believe it or not, this one field is the place that could get a portion of your medical expenses back from SARS}
See above for examples of what you can claim as a deduction.
Once you are happy with your return's contents, then press the "File" button and it will be submitted to SARS for assessment.
Wait for your assessment to be done - this should take a week or two and you should then get email (and SMS notification that the assessment has been done). The assessment is called an IT34 and it gives information of how SARS worked out what your Income Tax was for the previous year and whether you've paid too much or too little.
When reviewing your Assessment (IT34), take note that any amount representing a credit balance is followed by a minus (-) sign.... Look for a line that says "Balance of your account as on dd/mm/yyyy". If it says something like: "Due to you: 10,000.00 - " then start celebrating.... because this means that SARS are going to pay you R10,000 back.
This amount usually takes about 3 days to be transferred into your account.
If you are not happy with the assessment, then you have 30 business days from the date of the assessment to notify SARS in writing of your objection (providing reasons) - use the ADR1 form.
This, and more additional information is provided in the "Notes" section of the assessment form (IT34).
What is a deduction, and how much of my medical expenses can I hope to get back from SARS? This is best explained by example: Let's say that you are taxed at 40% Once you've calculated the expenses that you've incurred for the Handicap that have not been covered by Medical Aid, let's say R10,000. Then R10,000 can be taken as a deduction which means you can expect to receive 40% of R10,000 = R4,000 back from SARS.
Good luck! See above for examples of what you can claim as a deduction.
Once you are happy with your return's contents, then press the "File" button and it will be submitted to SARS for assessment.
Wait for your assessment to be done - this should take a week or two and you should then get email (and SMS notification that the assessment has been done). The assessment is called an IT34 and it gives information of how SARS worked out what your Income Tax was for the previous year and whether you've paid too much or too little.
When reviewing your Assessment (IT34), take note that any amount representing a credit balance is followed by a minus (-) sign.... Look for a line that says "Balance of your account as on dd/mm/yyyy". If it says something like: "Due to you: 10,000.00 - " then start celebrating.... because this means that SARS are going to pay you R10,000 back.
This amount usually takes about 3 days to be transferred into your account.
If you are not happy with the assessment, then you have 30 business days from the date of the assessment to notify SARS in writing of your objection (providing reasons) - use the ADR1 form.
This, and more additional information is provided in the "Notes" section of the assessment form (IT34).
What is a deduction, and how much of my medical expenses can I hope to get back from SARS? This is best explained by example: Let's say that you are taxed at 40% Once you've calculated the expenses that you've incurred for the Handicap that have not been covered by Medical Aid, let's say R10,000. Then R10,000 can be taken as a deduction which means you can expect to receive 40% of R10,000 = R4,000 back from SARS.
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Thank you so much for this usefull information. I also have an autistic son, and this article answered all my questions. The link on top "http://www.cs.sun.ac.za/aspergers/bin/view/Main/FinancialInfo" does not work.
ReplyDeleteVery interesting blog, however I am trying to find more information on whether there's any step-by-step guides for the new efiling system on sars if you could help?
ReplyDelete@Riaan, @Deon: Thanks for your comments - I have written another updated article. Info from the broken link "FinancialInfo" page is now included in my article.
DeleteI also included a 6 step guide describing the relevant fields on eFiling:
http://handytechtips.blogspot.com/2012/09/sars-efiling-how-to-claim-for-medical.html
How do I enter a negative amount on my tax return (e-filing)
ReplyDelete