Have a disabled child? Here's how to get SARS disability tax credits
Disclaimer: This article is aimed at providing general information only, and should not be seen as financial or tax advice. For advice about your family's specific circumstances and tax claims, please consult SARS or a tax consultant that is registered with the South African Institute of Tax Professionals (SAIT).
If you have a child with a disability, you've probably felt the pinch of those extra medical and educational expenses. But did you know that you could deduct some of those expenses from your tax?
Who may claim the SARS disability benefits?
In order to qualify for SARS' disability tax credits, your child's condition has to meet certain criteria.
- SARS sees a disability as a specific impairment that has a significant effect (or limitation) on your daily life.
- This could be a physical, sensory (visual or hearing), communication, intellectual, or mental impairment.
- The condition has to be long term, in other words likely to last for more than one year.
- The condition must have been confirmed by a relevant, registered medical practitioner.
- The condition must meet SARS' specific minimum criteria (found on this form)
- If the effects of the condition remain moderate to severe even after the maximum amount of treatment or therapy, SARS considers it a disability. But if treatment does have some effect, it could be seen as a physical impairment rather than a disability. In this case, you may still qualify for tax credits, though not to the same extent.
Let's look at some examples. If your child was diagnosed with Down syndrome, you don't automatically qualify for tax benefits. This is because the condition in itself does not impact her daily life and abilities. However, the physical impairments, speech impediments or intellectual disabilities associated with the syndrome may qualify.
Another example: if your child has a visual impairment, but a pair of good glasses helps him function with only mild limitations, SARS considers his condition as a physical impairment and not a disability. But if glasses or therapy have no effect and he still struggles to perform basic tasks, that could be a disability.
What are these benefits?
There are two parts to the tax benefits: an additional medical expenses tax credit, and a deduction of expenses directly related to the disability.
Additional Medical Expenses Tax Credit
There are limits to how much money taxpayers can claim back for medical expenses. When one of your dependents has a disability, the amount you can claim back is higher — not just for your child with the disability, but for the entire family. This could mean a significant refund at the end of the tax year.
Expenses directly related to disability
You can also deduct a portion of expenses directly related to your child’s disability from your total taxable income.
These expenses could include salaries for carers; training courses for parents; the purchase, insurance and maintenance of aids and prosthetics; alterations to your home or car to accommodate your child’s special needs; the training and care of service animals; specialised therapy and much more.
If your child has special educational needs, there are a lot of possible deductible expenses. For example:
- School fees — If your child goes to a special education school, you could deduct anything above the amount that you would have paid for your neighbourhood school.
- Travel costs — If the closest special education school is more than 10 km from your home, you might be able to claim travel expenses.
- Private tutors or facilitators — If your child needs a facilitator, these costs could also be deducted.
It’s important to remember that each child’s case is unique, and that tax law can get very complex. Just because something is on SARS’ list, doesn’t mean you can automatically claim it: it has to be directly relevant to your child’s case. The opposite is also true: just because something is not on the list, doesn't mean you can't claim it. You can deduct anything that SARS sees as essential to your child's condition.
How do you claim?
Step 1: Complete the form
Download this form (ITR-DD), and take it to a registered medical practitioner qualified to treat your child’s disability. If you’re not sure who to speak to, ask your family doctor or paediatrician for a referral. Do keep in mind that you may need to pay a fee to get your form completed.
If your child’s disability is confirmed as permanent or long-term, you only need to renew this form once every five years. If it is seen as temporary, you’ll need a new one every year.
Keep the form in a safe place. You won't automatically submit it to SARS, only when it is required as part of an audit.
Step 2: Fill in your tax form
When the next tax filing season arrives, you’ll find these questions on your form:
- “Are you, your spouse or any of your qualifying children a person with a disability?”
- “If ‘Yes’, has the disability been confirmed by a duly registered medical practitioner as prescribed?”
If you’re confident that your paperwork is in order, tick yes. On efiling, your form will now include the relevant fields where you fill in your deductions.
1. Get a tax specialist
While the process may seem straightforward, it's not always the case. "We are finding that SARS is becoming more and more sticky about claims," warns SAIT registered tax consultant Liza Southern. A good tax specialist can help you keep your claims relevant and above board, make sure your paperwork's in order, and help you deduct expenses you otherwise wouldn't have thought of.
2. All paperwork must be in the tax claimer's name
"Make sure that all medical documents (receipts and invoices) are in the name of whoever is claiming," advises Liza. In other words, if you're the one claiming an expense, make sure the invoice is not in your spouse's name.
3. Keep all receipts
Keep receipts for your entire family's out-of-pocket medical expenses. Remember, you get the additional medical expenses tax credit for you and all your dependants, not just for your child with the disability!
4. Keep record
Keep a detailed record of your expenses. If you're going to claim travel expenses, for example, you'll have to keep accurate records of kilometres.
5. You may be able to claim retrospectively
This means that if you've had medical expenses related to your child's disability in previous tax years, but perhaps didn't know about the tax benefits, you could claim back for up to three previous years as well. But, warns Liza, you'll still need the ITR-DD form for those three years, which means you'll have to get a specialist to fill in the form retropectively.
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Did you know you may be able to get tax benefits? Has a disability put your family out of pocket? Send us your comments and stories – anonymously if you wish – to firstname.lastname@example.org and we may publish them.