Before the last election, the Federal government promised a series of tax cuts and economic stimulus measures. One of these was an offset to benefit Low to Middle-Income earners. This new offset called the “Low and Middle Income Tax Offset” is now law. Eligible taxpayers may, therefore, be entitled to a tax offset of up to $1,080 per person.

One of the requirements to receive the Low and Middle Income Tax Offset is to lodge your 2019 tax return. So the sooner your 2019 return is completed, the sooner you may receive the offset.

All those eligible to receive the offset will get it once their return for 2019 has been lodged. There are no extra steps to take or forms to complete, it will be included in your tax return.

How does the offset work:

If your income is:

  • less than $37,000, your offset entitlement will be $255;
  • greater than $37,000 but less than $48,000, your offset entitlement will be $255 plus 7.5% of the excess above $37,000;
  • more than $48,000 but less than $90,000 your offset entitlement will be $1,080;
  • above $90,000 but less than $126,000, your offset entitlement will be $1,080, less 3% of the excess above $90,000.

An offset is not an automatic refund

It’s important to remember that an offset is not a refund. The offset reduces the amount of tax you pay on your taxable income. Depending on how much tax you paid throughout the year, the offset may result in a larger refund or smaller debt.

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