The Treasury Laws Amendment (Tax Relief So Working Australians Keep More of Their Money) Bill passed through the Senate with bipartisan support on Thursday 4 July 2019. As a result, more than 10 million workers will receive a tax offset to some degree, with around 4.5 million receiving the full lump sum.
Under the new package, all low and middle income earners making less than $126,000 a year will qualify, with the tax package to be delivered in three stages:
Stage One – The tax offset for people earning low and middle incomes will be increased for the 2018/19 and 2019/20 financial years, with a rebate of up to $1,080 (up from $530) after individual taxpayers file their tax return.
The base amount will increase to $255 per annum (up from $200).
Stage Two – From the 2022/23 financial year, the government will raise the upper threshold for the 19% tax bracket to $45,000 (up from $41,000).
The top threshold for the 32.5% tax bracket will be raised to $120,000 (up from $90,000).
The low income offset will also be increased to a maximum amount of $700 (up from $645).
Stage Three – From 1 July 2024, we will see flatter income tax brackets as follows:
- Up to $18,200 = Nil
- Exceeds $18,200 but is not more than $45,000 = 19%
- Exceeds $45,000 but is not more than $200,000 = 30%
- Exceeds $200,000+ = 45%
Assessments for returns already lodged are expected to start to issue from Friday 12 July 2019 and into the following week, which is in line with the normal processing of refunds for this time of year.
Eligible taxpayers don’t need to do anything to claim the tax offsets as they will be applied automatically by the ATO. This also includes taxpayers who already lodged their tax returns before the Bill was officially passed. Any tax refunds will be deposited into the taxpayer’s nominated bank account and they will not need to request an amendment.
Click here to read the Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Bill 2019. If you have any queries in relation to these changes, please don’t hesitate to contact Banks Group on (03) 9810 0700 or email@example.com.