Tax Bonus: Up to $1,080 Tax Refund for over 10 million Australians
Tax Bonus: New Law Passed to Allow 10.1 Million Taxpayers to Receive up to $1,080 Tax Refund from Low And Middle Income Tax Offset (LMITO)
As part of the biggest tax cut in modern history, in the 2019 Federal Budget, the government proposed increasing the LMITO from the 2018/2019 financial year to $1080. This has now passed and legislated.
The government estimates that 4.5 million Australian taxpayers will be eligible for the full LMITO of $1,080, while another 5.6 million will receive a partial LMITO.
New Low and Middle Income Tax Offset (LMITO)
A new Low and Middle Income Tax Offset (LMITO) applies for 2018–19, 2019–20, 2020–21 and 2021–22 income years.
Australian resident individuals (and certain trustees) whose income does not exceed $125,333 are entitled to the new low and middle income tax offset. Entitlement to the new offset is in addition to the existing low income tax offset, and is available on assessment after you lodge your income tax return.
How to apply for the LMITO Refund
Taxpayers don’t need to do anything different to receive the offset. The ATO will apply the refund based on your taxable income on your tax return lodged. Of course, we always suggest having your tax return prepared by a qualified registered tax agent who could assist you with maximising your allowable deductions, tax offsets and credits.
Some taxpayers may have already filed their 2018/19 tax return. Accordingly to an ATO announcement, “ Should proposed changes to the new low and middle income tax offset become law after we process your clients’ 2018–19 tax returns, we will amend their assessments to add any additional credits. You will not need to request amendments.”
When will I receive the Tax Refund?
The ATO aim to process an Income Tax Return within 50 days of being received. However, if you lodge through a registered tax agent or MyGov, you could expect to have their refund released within 2 weeks.
If you sent your tax return by ordinary post, you can expect to wait seven weeks or more.
The ATO hasn’t published any new timeframe due to this new tax cuts from Low and Middle Income Tax Offset. Accordingly to the ABC News, what we know is that the ATO is currently flooded with large volume of calls. “For example, we received over 90,000 calls yesterday to our call centres.”
If I own the ATO money, do I still get the tax bonus?
The new Low and Middle Income Tax Offset will work in the same way as other tax offsets. It reduces the amount of tax low and middle income earners need to pay. If any balance left after offsetting your existing tax liabilities, the balance would be refunded to you.
Need any help? Contact our highly rated tax accountants for further assistance.
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