Tax Return:: Low and Middle Income Tax Offset (LMITO) Ending

Hello, this is your tax accountant, P&C Tax Professionals.

In the October 2022 Budget, it has been revealed that the Government will no longer extend the low and middle income tax offset (LMITO) which was previously provided for 2019, 2020, 2021 and the 2022 financial year. This means that your 2022 financial year’s tax return will be the last year you would be able to claim the LMITO. Starting from the 2023 financial year (1 July 2022 – 30 June 2023), LMITO will no longer be available which may result in a decrease in your tax refund amount by $675 - $1,500 (for taxable income up to $90,000 and phasing out for those of you who have a taxable income of 90,001 to $126,000).

On the other hand, the low income tax offset (LITO) will still be in place for the 2023 financial year and beyond.

The following LITO table will apply to your 2023FY tax return:

In order to be eligible for the LITO, you must satisfy the following conditions:

> You are an Australian resident for income tax purposes

> You pay tax on your taxable income

> You have a taxable income that is under specified income thresholds (as shown in the table above)

There is no need for you to apply for the low income tax offset as these will automatically be applied to your tax return when you lodge it with the ATO or with us (P&C Tax). These income tax offsets are not separate payments you would receive on top of your tax refund. It is simply to help you reduce the tax you need to pay when you lodge your annual tax return.

Let’s wrap it up here, but if you have any further questions in the meantime, please do not hesitate to contact us through our official Facebook Page (P&C Tax Professionals – Australia) or by sending us an email to pnctax@naver.com.

Thank you and bye for now!