Powered by momentummedia
nestegg logo
Powered by momentummedia
nestegg logo
nestegg logo

 

 

Earn

Backdated tax cuts unlikely, ATO and Treasury confirm

  • October 09 2020
  • Share

Earn

Backdated tax cuts unlikely, ATO and Treasury confirm

By Cameron Micallef
October 09 2020

Australians will be forced to wait until July 2021 to see some of the benefits of the government's latest income tax cuts, the ATO has confirmed.

Backdated tax cuts unlucky, ATO and Treasury confirm

Backdated tax cuts unlikely, ATO and Treasury confirm

author image
  • October 09 2020
  • Share

Australians will be forced to wait until July 2021 to see some of the benefits of the government's latest income tax cuts, the ATO has confirmed.

Backdated tax cuts unlucky, ATO and Treasury confirm

Treasurer Josh Frydenberg announced during the budget, which was delivered Tuesday, 6 October, that he would bring forward stage 2 tax cuts originally scheduled for July 2022, with the tax cut being immediately backdated to 1 July 2020.

The backdated tax cuts to 1 July this year will see the top threshold of the 19 per cent income tax bracket increased from $37,000 to $45,000.

The top threshold of the 32.5 per cent personal income tax bracket will also increase from $90,000 to $120,000.

While Labor has offered its support of the brought-forward income tax cuts, the measure has now been rolled into an omnibus bill that contains four other tax measures that were announced on Tuesday’s federal budget.

Advertisement
Advertisement

Mr Frydenberg said taxpayers would likely see those cuts only right before Christmas.

“What the Tax Office has told us is that they’re going to amend the PAYG withholding tax schedules and that will be once we know that the Labor Party is supporting this bill… so that will be from December or November onwards, so before Christmas,” Mr Frydenberg said at the National Press Club on Wednesday.

“Those changes will be made, and the first six months will be provided at the end of the year together with a low and middle-income tax offset.”

The ATO has also now confirmed its delivery of the backdated tax cuts, noting that it cannot pass on over-withheld amounts for the earlier months of this financial year into subsequent months.

The adjustments to the withholding schedules are designed to ensure that taxpayers have the correct amount of tax withheld from their pay going forward,” the ATO said in a statement on Thursday. 

“It is not possible for the ATO to determine the extent of ‘over-withholding’ that may have occurred for each and every taxpayer as this is highly dependent on individual circumstances and will be different for everyone. 

The government estimates around 11.6 million Australians will see some form of tax cuts at the cost of $17 billion.

Backdated tax cuts unlikely, ATO and Treasury confirm
Backdated tax cuts unlucky, ATO and Treasury confirm
nestegg logo

Forward this article to a friend. Follow us on Linkedin. Join us on Facebook. Find us on Twitter for the latest updates
Rate the article

About the author

author image

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

more on this topic

more on this topic

From the web

Recommended by Spike Native Network

More articles

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.