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Do I need to pay tax on government benefits?
Australians are unaware of the tax implications of government benefits they have received throughout the COVID-19 period, new research has revealed.
Do I need to pay tax on government benefits?
Australians are unaware of the tax implications of government benefits they have received throughout the COVID-19 period, new research has revealed.
According to stats collated by H&R Block, approximately 44 per cent of respondents do not understand how the JobKeeper program works or the tax implications of it.
“Tax time is stressful enough; however, coupled with the current economic difficulties, many Aussies will feel the added pressure. With the recent droughts, bushfires, floods, and now COVID-19, we can all agree that 2020 isn’t going to be your average tax year,” said H&R Block’s director of tax communications, Mark Chapman.
“With various stimulus packages and people working from home, there are going to be a lot of people with a lot of questions,” he stated.
The COVID-19 crisis has left hundreds of thousands of Aussies out of work, with added financial pressures and a level of uncertainty regarding their future earning ability.
“Plus, with many of Australia’s full-time workforce now working from home, there will be a surge in interest in the tax implications arising from home working – the line between what is deductible and what isn’t can become blurred,” the tax specialist noted.
He explained that government benefits have different tax implications, with taxpayers encouraged to seek advice on their tax status.
“Due to COVID-19, the Australian government has released three different stimulus payments: the $550 Coronavirus Supplement that you get if you’re on JobSeeker, the one-off $750 Economic Support Payment, and the $1,500 JobKeeper wage subsidy,” Mr Chapman said.
He also reminded low- and middle-income earners of the tax offset they are entitled to receive.
“The government’s $1,080 tax offset is here again in 2020, with the maximum offset available for those earning between $48,000 and $90,000 and lower amounts for those earning more or less (and nothing at all for those earning more than $126,000),” Mr Chapman concluded.
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