On May 9, 2023, Australian Federal Treasurer Jim Chalmers delivered the 2023-2024 Federal Budget.
In this budget, there was no mention of extending the Low- and Middle-Income Earner Tax Offset beyond the 2021-2022 financial year.
The Low-and Middle-Income Earner Tax Offset (LMITO) was first introduced in the 2019-2020 Federal Budget to provide a level of relief to low and middle-income earners, and was extended into the 2020-2021 and 2021-2022 financial years as a result of the COVID-19 pandemic.
It was announced that the LMITO will end as of 30 June 2022, subsequently impacting tax returns for the 2022-2023 financial year.
If you have a taxable income below $126,000, you will most likely face a higher tax bill – ensuing either a lower tax refund for the 2022-2023 financial year, or higher tax liability.
The LMITO was not a refund, but the offset was designed to reduce the tax needed to pay. Unused offsets cannot be refunded.
If you would like to further discuss this, contact the Agilis CA Executive Tax team today.