Who is eligible for the low and middle income tax offset?

In Plain English

For the 2018-19, 2019-20, 2020-21 and 2021-22 income years, if you're an Australian resident individual and your taxable income is $126,000 or less, you may be entitled to the Low and Middle Income Tax Offset. Also, if you're a trustee who is liable to be assessed in respect of a share of the trust’s net income to which a beneficiary is presently entitled, the beneficiary is an Australian resident individual, and that share does not exceed $126,000, you may be entitled to the Low and Middle Income Tax Offset.

Detailed Explanation

According to Subdivision 61-D of the Income Tax Assessment Act 1997, specifically section 61-105, an individual is entitled to the Low and Middle Income tax offset for the 2018-19, 2019-20, 2020-21 or 2021-22 income year if:

Additionally, section 61-105(2) states that a trustee is entitled to the tax offset for the 2018-19, 2019-20, 2020-21 or 2021-22 income year if:

  • For the income year, they are a trustee who is liable to be assessed under section 98 of the Income Tax Assessment Act 1936 in respect of a share of the net income of a trust; and
  • The beneficiary who is presently entitled to that share is an individual who is an Australian resident at any time during the income year; and
  • That share does not exceed $126,000 (as amended by the Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Act 2019).

It's important to note that this tax offset was repealed on 1 July 2024 by the Treasury Laws Amendment (Personal Income Tax Plan) Act 2018 as indicated in the note following sections 61-105 and 61-107.