New Tax Offset – Will I get the Offset as a Refund
NO, you won’t!
This is called a low and middle income tax offset (LMITO), it is an offset against income tax payable.
There is a lot of confusion about this. The most common misunderstanding seems to be a perception that this is a refund, but it isn’t. There has to be tax payable to be able to get the offset. If the amount payable is less than the offset you will not receive the unused portion as a refund.
For example, if your tax payable is $650 and you are eligible for $1,000 LMITO the amount you have to pay becomes $0. You do not get a refund of $350.
In the 2018-19 income year Taxpayers with a taxable income:
– of $37,000 or below can now receive an offset of up to $255
– between $37,000 and below $48,000 can now receive $255, plus an amount equal to 7.5% to the maximum offset of $1,080
– from $48,000 and below $90,000 are now eligible for the maximum offset of $1,080
– above $90,000 but no more than $126,000 are now eligible for a offset of $1,080, less an amount equal to three per cent of the excess.
More on this at the ATO.