The New Tax Offset for low and middle income tax offset changes are now Law. Any Taxpayer with an individual taxable income less than $126,000 is entitled to some of the low and middle income tax offset.
LOW AND MIDDLE INCOME TAX OFFSET
The offset rules:
- The maximum offset is $1,080 per annum,
- The base amount offset of $225 per annum applies to taxpayers with income of up to $37,000,
- The amount you are credited with depends on your income and how much tax you’ve paid throughout the year,
- No Taxpayer, no matter the income level, will automatically get an extra $1,080 in their tax return,
- You do not need to do anything different to claim these offsets – just lodge your individual tax return and the ATO will automatically process any offsets you are entitled to,
- Employers are not required to change how much they withhold from your tax each week.
An offset is not an automatic refund (You need to have paid either PAYG Withholding Tax or PAYG Tax instalments in order to be eligible to receive an offset as a refund).
SMALL BUSINESS OFFSET
This offset is separate from the Small Business Income tax offset which can reduce the tax you pay by up to $1,000. It’s important to remember that an offset is not a refund.
Note: An offset reduces the amount of tax you pay on your taxable income and depending on how much tax you paid throughout the year, the offset may result in a larger refund or smaller debt.
Date of Issue: 31 July 2019
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