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Understanding the 2019 low and middle-income tax offset

Peter Sa - Tuesday, July 23, 2019

Low-income tax offset

If your taxable income is less than $66,667, you will get the low-income tax offset. The maximum tax offset of $445 applies wher the taxable income is $37,000 or less. 1.5 cents for each dollar reduce this amount over $37,000.

Low and middle-income tax offset

If your taxable income is less than $126,000, you will get some of the low and middle-income tax offset. The offset amount depends on  your level of income and the amount of tax paid throughout the year.

The maximum offset is $1080 per annum. The base amount is $255 per annum. It doesn't mean that you will get an extra $1,080 in your tax return. The new low and middle-income tax offset is available for 2018-19, 2019-20, 2020-21 and 2021-22 income years and is in addition to the low-income tax offset.

Understanding the 2019 low and middle-income tax offset

You are not required to do anything to claim the low and middle-income tax offset. The ATO will work this out for you when you lodge your tax return. The offset will reduce the amount of tax you pay on your taxable income. It is a non-refundable tax offset, so you can't receive a refund for any unused amount of the offset.

This tax offset cannot be claimed where you have not received any income. If you have received income, the amount of the offset you are entitled to depends on taxable income. If the offset amount reduces your tax payable to zero, any amount of the low and middle-income tax offset non-refundable.

In summary, if your taxable income:

  • Does not exceed $37,000, you will be entitled to an offset amount of $255 on any tax payable. 
  • Exceeds $37,000 but no more than $48,000, you will be entitled to an offset amount of $255, plus 7.5% of the excess above $37,000 to a maximum offset of $1,080 on your tax payable.
  • Exceeds $48,000 but no more than $90,000, the maximum offset amount of $1,080 is applied to any tax payable.
  • Exceeds $90,000 but no more than $126,000, an offset amount $1,080 less 3% for every dollar above this amount.










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