Low-and Middle-Income Tax Offset Not Available For 2023 Tax Return

Low-and Middle-Income Tax Offset Not Available For 2023 Tax Return

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.

For additional information on the Low-and Middle-Income Earner Tax Offset, click here to visit the ATO website.

If you would like to further discuss this, contact the Agilis CA Executive Tax team today.

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