Businesses operating on an accruals basis
Where a business operates on an accruals basis, JobKeeper payments are derived at the time when the business entity becomes legally entitled to those payments. The ATO has confirmed that when it receives the relevant business monthly declaration, this triggers the business entity’s entitlement to JobKeeper and the payment of that entitlement. For JobKeeper payments for fortnights ending in June 2020, the business monthly declaration will generally be lodged in July 2020 (or a later month). Therefore, JobKeeper payments for this period will be assessable in the 2020-21 income year.
Businesses operating on a cash basis
Where a business operates on a cash accounting basis, JobKeeper payments are derived when the entity receives the payments. JobKeeper payments for fortnights ending in June will be received by the business in July 2020 (or a later month) and, therefore, assessable in the 2020-21 income year. Payments can only be made after the business entity provides a valid completed business monthly declaration to the ATO.
For assistance assessing JobKeeper payments or preparing and lodging your 2020 year-end financials and income tax return, please contact our tax specialists on:
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