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The COVID-19 work deductions Aussies may be able to claim



The end of the financial year is a little over a fortnight away, prompting millions of Australians to begin getting their finances in order for the start of tax season.

This year's returns face the added complexity of many workers returning to the office on a limited basis, meaning many will have to calculate their work-from-home expenses on a day-by-day basis.

There's also the confusing issue of workplace expenses, especially if you had to purchase something that would allow you to work safely amid the presence of COVID-19.

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This year the Australian Tax Office (ATO) advises that from July 1, 2021 taxpayers who paid for a COVID-19 test for work-related purposes can now claim them as a deduction.

As always, taxpayers will need to prove that they purchased the tests themselves and they must not have been reimbursed by their employer.

Of course you can only claim a deduction for the tests you used to prove you were COVID-19 negative to attend work – not necessarily every test you've ever taken.

"If you purchased a COVID-19 test for a trip with your mates, you can't claim a deduction" said ATO Assistant Commissioner Tim Loh.

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As Loh explains, some occupations may have also had other pandemic-related expenses that weren't covered by their employer.

"If you're spending your working day in close proximity to customers and at risk of contracting COVID-19, you may be able to claim a deduction for protective items such as gloves, face masks, or sanitiser," he explains. 

"This will be most common in industries such as retail, cleaning and hospitality."

Critically, Loh said it was important for Aussies to realise which government payments are counted as taxable income.

JobSeeker payments are counted as taxable income and will be automatically pre-filled in recipients tax returns once it's ready.

Conversely, the Australian Government's COVID-19 disaster payment (delivered through Services Australia) is not taxable and does not need to  be included in tax returns.

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However the Pandemic Leave Disaster Payment is taxable.

As Loh explains, this payment needs to be included in tax returns for the income year the amounts were received. Services Australia provided recipients with a letter each time they received a payment.

Those who received the Pandemic Leave Disaster Payment will need to manually add up all the amounts received and include the total amount received in their tax return. This payment won't be prefilled into the return.

"While the information isn't prefilled for you, not adding Pandemic Leave Disaster Payments to your tax return will delay the processing of your return and your potential refund," Loh said.

Taxpayers who chose to use a registered tax agent should remember to let their registered tax agent know they received the Pandemic Leave Disaster Payment.

The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.

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