Low and Middle Income Tax Offset Extended

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Low and middle income tax offset extended

What is Low and middle income tax Offset?
A tax offset means you pay less tax (also known as your tax payable) on your taxable income (that is, your total income minus any deductions).

If your taxable income is between $37,001 and $126,000, you will get some or all of the low and middle income tax offset. This is in addition to the low income tax offset.

Date of effectFrom 1 July 2021 to 30 June 2022

As widely predicted, the Low and Middle Income Tax Offset (LMITO) will be extended for another year.

The LMITO provides a reduction in tax of up to $1,080 for individuals with a taxable income of up to $126,000 and will be retained for the 2021-22 year.

Taxable income Offset
$37,000 or less$255
Between $37,001 and $48,000$255 plus 7.5 cents for every dollar above $37,000, up to a maximum of $1,080
Between $48,001 and $90,000$1,080
Between $90,001 and $126,000$1,080 minus 3 cents for every dollar of the amount above $90,000
The tax offset is triggered when a taxpayer lodges their tax return.