By Chris Herbst, Chartered Business Accountant in Practice (CBAP) with CIBA, General Tax Practitioner (GTP) with SAIT, Stellenbosch University. Team registered with SAIT, SAIPA and CIBA.
Medical costs for a disability earn a far larger tax credit than ordinary medical costs, but only when the disability has been confirmed on the right SARS form. That form is the ITR-DD. This guide explains what the ITR-DD is, who completes and signs it, how long it stays valid, which expenses it unlocks, where it shows up on your ITR12 and the mistakes that cause SARS to disallow the claim.
What is the ITR-DD form?
The ITR-DD is the SARS Confirmation of Diagnosis of Disability form. Its heading states its purpose: to determine eligibility under section 6B of the Income Tax Act. A registered medical practitioner uses it to confirm that you, your spouse or your child is a person with a disability as the Act defines it.
Why does SARS need a separate form for disability?
Section 6B of the Income Tax Act 58 of 1962 gives a more generous additional medical expenses tax credit where there is a "disability" as defined, and that definition requires a diagnosis "in accordance with criteria prescribed by the Commissioner". The ITR-DD is where those criteria are set out and where the practitioner records the diagnosis.
Do I send the ITR-DD to SARS with my return?
No. The form itself instructs that it must not be submitted with your tax return. You keep it and submit it to SARS only on request, usually during a verification. The SARS Comprehensive Guide to the ITR12 (Revision 40) adds that the form must be readily available and retained for 10 years from its date of issue.
What counts as a disability for SARS?
Section 6B(1) defines a disability as a moderate to severe limitation of a person's ability to function or perform daily activities as a result of a physical, sensory, communication, intellectual or mental impairment. The limitation must have lasted, or have a prognosis of lasting, more than a year, and it must be diagnosed by a duly registered medical practitioner under the criteria the Commissioner prescribes.
What does "moderate to severe limitation" mean?
The ITR-DD explains it as a significant restriction on a person's ability to perform one or more basic daily activities after maximum correction. Maximum correction means appropriate therapy, medication and the use of devices. The form also states that the criteria assess the functional impact of an impairment, not the medical condition itself.
What are the minimum criteria on the form?
Part B of the ITR-DD sets a minimum requirement for each type of impairment. A few examples from the form:
- Vision: visual acuity in the better eye, with the best possible correction, of less than 6/18, or a visual field of 10 degrees or less around central fixation.
- Hearing (adult): bilateral hearing loss with a pure tone average of 25 dBHL or more in each ear, or unilateral loss of 40 dBHL or more in the affected ear, measured without amplification devices.
- Physical: the person is unable to walk, walks only with assistive devices such as crutches or a walking frame, walks with a marked degree of difficulty, or is functionally limited in the use of the upper limbs.
- Mental: a diagnosed mental impairment that moderately or severely limits major life activities, with moderate meaning a Global Assessment of Functioning score between 31 and 60.
- Intellectual: a moderate to severe impairment in intellectual functioning with a significant limitation in at least two adaptive skill areas, with moderate meaning an IQ between 35 and 49.
What is the difference between a disability and a physical impairment?
The Act does not define physical impairment. The SARS List of Qualifying Physical Impairment or Disability Expenditure explains that SARS reads it as a limitation that is less restraining than a disability, in other words mild. A physical impairment still allows listed expenses to be claimed, but under the less generous calculation with the 7.5% floor described below. No ITR-DD is needed for a physical impairment claim.
Who completes and signs the ITR-DD?
The form has four parts, and the SARS Guide on the Determination of Medical Tax Credits (Issue 18) states that all of them must be completed in full.
What do I fill in myself?
Part A carries the details of the person with the disability and, where that is not you, the details of the person claiming the deduction and the relationship (spouse, child or other). Part A also holds an authorisation that lets the practitioner share the relevant records with SARS. It is signed by the person with the disability, or by a parent, guardian or court-appointed curator when that person is a minor or is unable to sign.
Which medical practitioner signs it?
Parts B, C and D are completed by a duly registered medical practitioner who is trained to diagnose the applicable disability, and the SARS medical guide notes that this means a practitioner registered with the HPCSA. The form lists examples by impairment: an optometrist or ophthalmologist for vision, an ENT specialist or audiologist for hearing, a speech-language pathologist for communication, an orthopaedic surgeon, neurosurgeon, physiotherapist or occupational therapist for physical impairments, and a psychiatrist or clinical psychologist for mental and intellectual impairments.
What does the practitioner certify?
In Part C the practitioner rates the functional limitation as mild or moderate to severe, describes its impact on daily living, confirms whether it has lasted or will last more than 12 months, and states whether it is permanent. Part D carries the practitioner's HPCSA number, contact details, signature and practice stamp. The ITR12 guide asks you to make sure the form is completed and stamped before you answer the disability question on your return.
How long is an ITR-DD valid?
Validity depends on whether the disability is permanent. The table summarises the rules as the ITR-DD and the SARS medical guide state them.
- Permanent, first qualified on or after 1 March 2019: How long the ITR-DD lasts: 10 years; What you do: Keep the form while the disability stays moderate to severe
- Permanent, valid form held on 1 March 2019: How long the ITR-DD lasts: Five more years after its expiry; What you do: No new form until that extended date
- Not permanent: How long the ITR-DD lasts: One year from 1 March of the tax year; What you do: Have a new ITR-DD completed each year
Do I need a new ITR-DD every year?
Only for a temporary disability. A permanent disability confirmed on or after 1 March 2019 is covered for 10 years, provided it remains moderate to severe. Your return asks for the date the latest ITR-DD was confirmed, so keep track of when each form was signed.
What about people who qualified as "handicapped" in the past?
The ITR12 guide notes that the Act replaced the old term "handicapped" with the current definition of disability, and that a person who qualified under the old term must have the disability re-confirmed to continue claiming. In practice that means a current ITR-DD.
How does a confirmed disability change your medical tax credit?
A confirmed disability for you, your spouse or your child moves the whole household's medical costs into the more generous section 6B calculation, the same one used for taxpayers aged 65 and older. The ITR12 guide states that the 7.5% of taxable income limitation does not apply in that case.
What is the formula with a disability?
The SARS medical guide sets the additional medical expenses tax credit at 33.3% of medical scheme fees that exceed three times your medical scheme fees tax credit, plus 33.3% of qualifying out-of-pocket expenses, including disability expenditure. In formula form: 33.3% x [(contributions minus 3 x the section 6A credit) + qualifying expenses].
What is the formula without one?
For other taxpayers under 65 the credit is 25% of contributions above four times the section 6A credit plus qualifying expenses, but only to the extent the total exceeds 7.5% of taxable income. The ITR12 guide states that if a disability is not confirmed, the qualifying expenses cannot be claimed in full and the 7.5% limitation applies.
What does that look like in numbers?
Example 17 in the SARS medical guide uses a taxpayer with taxable income of R704,000, medical scheme contributions of R66,900, a section 6A credit of R11,688 and qualifying expenses of R41,923 (including R32,691 for two hearing aids for a four-year-old daughter with a confirmed hearing disability). With the ITR-DD, the guide calculates an additional credit of R24,561.74. Applying the guide's other-taxpayer formula to the same figures gives 25% x [(R66,900 minus R46,752) + R41,923 minus R52,800], which is R2,317.75. The form is the difference between those two results.
Which expenses does the ITR-DD unlock?
From 1 March 2020 the SARS list of qualifying physical impairment or disability expenditure is prescriptive. The ITR12 guide states plainly that an expense not on the list cannot be claimed under paragraph (c) of the definition of qualifying medical expenses in section 6B(1).
What is on the list?
The list is grouped into categories: personal care attendant expenses; travel and transportation; insurance, maintenance, repairs and supplies for listed goods; prosthetics; aids and other devices (wheelchairs, hearing aids and amplification systems, speech-generating devices, pressure care mattresses, bathroom aids, lifts and grab rails among them); services such as sign-language interpretation and special education schools; continence products; service animals; and alterations to assets, such as ramps, wider doorways and vehicle modifications.
Does a listed item always qualify?
No. The list explains that an expense must be necessarily incurred and paid in consequence of the disability, so it must help with the particular limitation. Its own example: a hand-held talking GPS qualifies for a person with a visual impairment but not for a wheelchair user who has no visual impairment.
Are home alterations covered?
Ramps, wider passages and doorways, lowered cabinets, automated doors and gates, and alarm modifications are listed. The list adds that renovation costs must be reasonable, would not typically increase the value of the property and would not typically be incurred by someone without a moderate to severe mobility impairment.
What if I donated to a school to build a ramp for my child?
The list treats a parent's payment to make a school accessible as a qualifying disability expense, unless the school issues a section 18A receipt for it. In that case the amount is claimed as a donation instead, as our section 18A certificate guide explains.
Who can be the person with the disability?
The disability category is limited to you, your spouse and your child. The SARS medical guide states that other dependants, such as a parent you support, do not fall into this category regardless of disability status. Their qualifying medical expenses can still be claimed, but under the other-taxpayer calculation with the 7.5% floor. The ITR12 guide repeats this on the return itself: the disability question excludes family members you support for family care.
How do I claim disability expenses on eFiling, step by step?
The ITR12 guide (section 10.1.11) sets out the fields. The steps in order:
- Get the ITR-DD completed first. Download the form from SARS, complete Part A, sign the authorisation, and take it to the practitioner for Parts B to D and the practice stamp.
- Gather your documents. Your medical scheme tax certificate, proof of payment for every out-of-pocket expense, and your IRP5 if your employer pays contributions (code 4005, covered in our SARS code 4005 guide).
- Answer the medical question on the return wizard. Mark the box for qualifying disability and/or medical expenses paid for yourself, your spouse or your qualifying children.
- Answer the disability questions. In the medical section, answer "Are you, your spouse or any of your qualifying children a person with a disability?" and then whether a duly registered medical practitioner has confirmed it. Select yes only once the ITR-DD is signed and stamped.
- Complete Details of Disability. Enter the number of people with a disability, then for each one: who it is, date of birth, temporary or permanent, the date the latest ITR-DD was confirmed (CCYYMMDD) and the practitioner's practice number.
- Enter the disability expenses under code 4023. This is for qualifying disability expenses for you, your spouse and children that were not recovered from a medical scheme and not included elsewhere.
- Enter the other medical amounts. Contributions under code 4005, claims not recovered from the scheme under code 4020 and other qualifying out-of-pocket expenses under code 4034, each backed by proof of payment.
- Check the assessment. Compare the medical credits on your ITA34 with what you expected. Our ITA34 guide explains how to read it.
Where does a physical impairment go instead?
Expenses for a physical impairment that is not a confirmed disability go under code 4022. The ITR12 guide asks you to keep details of how the amount was calculated and the nature of the impairment.
What happens if SARS asks for the ITR-DD?
Because you hold the form rather than file it, SARS asks for it when it verifies a disability claim, together with proof of payment for each expense. Our guide to SARS verification explains how to upload documents on eFiling. If SARS disallows a claim that is properly supported, the route is a formal objection, covered in our notice of objection guide.
Can I fix a disability claim I left off a submitted return?
Yes. eFiling lets you correct a submitted ITR12 through a request for correction. See our guide to a request for correction for how the correction process works on eFiling.
Common Mistakes With the ITR-DD
Ticking "confirmed" before the form is signed
The return asks whether a practitioner has confirmed the disability. Answering yes without a completed and stamped ITR-DD leaves the claim unsupported on verification.
Using an expired form
A temporary disability needs a new ITR-DD for each tax year. A permanent one needs renewal after 10 years. An expired form does not support the current year's claim.
Claiming a parent's disability in the disability category
Only you, your spouse and your children count. A supported parent's expenses belong in the family member section and the other-taxpayer calculation.
Claiming items that are not on the SARS list
Since 1 March 2020 the list is prescriptive. An item that seems related to the disability but does not appear on the list is not a qualifying disability expense.
Claiming costs the medical scheme refunded
Qualifying expenses exclude amounts recovered from a medical scheme. Only what you paid and were not reimbursed counts, backed by proof of payment.
Choosing a practitioner outside the right field
The practitioner must be trained to diagnose the applicable disability. A form for a hearing disability signed by someone outside the hearing field invites questions.
For more on medical claims, read our guides to SARS code 3810, SARS code 3813 and medical tax deductions, or the checklist of documents needed to file your tax return. All of our personal tax guides are on the personal tax hub.
Do You Need Help With the ITR-DD?
We prepare ITR12 returns for taxpayers across South Africa, including checking each disability claim against the ITR-DD, the SARS list and your proof of payment before it is filed. See what is included on our personal tax pricing page, or contact us to have your return and medical claims prepared.
