Low and Middle Income Tax Offset

The Low and Middle Income Tax Offset (LMITO) is a tax offset introduced as part of the Budget 2018 measures to revise the personal income tax rates.

It applies in the years from 1 July 2018 to 30 June 2022.

Legislation for this measure was approved by parliament in June 2018.

Offset increased – Budget 2019 (legislation passed 4 July 2019)

Announced as part of the 2019 budget measures (2 April 2019) the LMITO base amount is to be increased from $200 to $255; the maximum amount will increase from $530 to $1080. Revised taxable income tests are also to be applied.

Note for 2019 tax returns:  The Tax Office has indicated that 2018-19 income tax assessments which issued before the new law is approved will be automatically amended (i.e. re-issued) once the legislation has passed to apply the higher level rebate values as set out below. An application for amendment is not required.

LMITO from 1 July 2018 

IncomeOffset
up to $37,000$255
$37,001 to $48,000$255 plus 7.5 cents for each dollar over $37,000
$48,001 to $90,000$1,080
$90,001 to $126,000$1,080 less 3 cents for each dollar over $90,000

The LMITO applies in addition to the Low Income Tax Offset (LITO). The offset is paid in arrears, i.e. applied on an annual basis as part of the annual income tax assessment calculation.

From 1 July 2022 both the LMITO and LITO will be replaced by a single low income tax offset (a new LITO). The calculation formula for the new offset is set out here.

 

 

This page was last modified 2019-07-04