ACCORDING to the Australian Taxation Office, in the 2012-13 Budget it was announced that eight depedency tax offsets would be consolidated into a single non-refundable tax offset, effective from 1 July 2012. The draft legislation and explanatory memorandum have been released as an exposure draft for public consultation.
The offsets to be consolidated are:
· Housekeeper
· Housekeeper (with child)
· Child-housekeeper
· Child-housekeeper (with child)
· Invalid spouse
· Carer Spouse
· Invalid Relative
· Parent/parent-in-law
The changes mean:
· A new offset T7 Dependent (invalid and carer) will only be available to taxpayers who maintain a dependant who is genuinely unable to work due to carer obligations or disability. This condition means that the taxpayer can no longer claim for a housekeeper or child-housekeeper as part of this new tax offset.
· Clients eligible for the zone/overseas forces tax offset at T5 will not be eligible to claim the new tax offset. They may be eligible to claim the offsets that have been consolidated. These offsets are not part of the zone/overseas forces tax offset but will be claimed at T5.
· T1 Dependent spouse tax offset can still be claimed in respect of spouse who was born on or before 30 June 1952.
Mike Alvarez, a CPA and Registered Tax Agent, is the Director of QA Audit and Tax Services Pty Ltd, a CPA Practice, telephone 02 9628 2933.