Government approves increased tax relief for Low and Middle Income earners

Following the Federal Budget handed down in April this year, the Government has now approved an increase to the Low and Middle Income Tax Offset of originally $530 to become a maximum of $1080. The Government has also agreed to increase the eligible income threshold from $125,333 to $126,001.

How much of the Tax Offset am I entitled to?

Depending on how much your taxable income calculates to will depend on how much of the Tax Offset you are entitled to. 

From the 2018–19 income year:

  • Taxpayers with a taxable income which does not exceed $37,000 will receive a low and middle income tax offset of up to $255.
  • Taxpayers with a taxable income which exceeds $37,000 but is not more than $48,000 will receive $255, plus an amount equal to 7.5 per cent to the maximum offset of $1,080
  • Taxpayers with a taxable income which exceeds $48,000 but is not more than $90,000 will be eligible for the maximum low and middle income tax offset of $1,080
  • Taxpayers with a taxable income which exceeds $90,000 but is not more than $126,000 will be eligible for a low and middle income tax offset of $1,080, less an amount equal to 3 per cent of the excess.

* The above 4 points are taken from the Australian Taxation office website and can be referred to here .

How can I claim my tax relief?

Claiming your tax relief is as simple as lodging your 2019 Income Tax Return as you normally would. The appropriate Low and Middle Income Tax Offset will be automatically applied to your Income Tax Return depending on your total taxable income amount. Upon lodgement of your return the tax offset will either help to reduce your tax payable or form part of your tax refund.

What if I have already lodged my 2019 tax return?

The ATO has advised that in the instance where a person has already lodged their 2019 Income Tax Return prior to the legislation being approved, the ATO will automatically amend the return to include the increased tax offset and refund any amounts owed to you. You do not need to request an amendment for this.

Need help or want to know more?

If you would like help lodging your income tax return or have questions about whether the tax offset applies to you, speak to your usual Mazars advisor, or alternately call us on:

Brisbane

Melbourne

Sydney

+61 7 3218 3900

+61 3 8458 0000

+61 2 9922 1166

Please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice.

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