The Low and middle income tax offset (LMITO) was abolished on 30 June 2022. Therefore, it does not apply for 2023 financial year.  This can affect your tax returns in subsequent years. Your tax outcome can result in lower tax refund by $1500 because the maximum offset available in the 2022 financial year was $1500.

The Low-income tax offset (LITO) is different and is applicable from 1 July 2022, and depends on what you earned as follows:

• $37,500 or less, you receive $700
• Between $37,501 and $45,000, you receive $700 less 5 cents for every dollar above $37,500
• Between $45,001 and $66,667 you receive $325 less 1.5 cents for every dollar above $45,000.

Therefore, the LITO cuts out at $66,667 for the 2022-23 income year.

Note:

• If the LITO offset is greater than your tax payable, the excess is not refundable.

The LITO are automatically included in your tax assessment calculation, which means a claim does not need to be made within your tax return.