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June 2, 2021

What Do Tax Cuts Mean If You’ve Already Lodged Your Return?

The COVID-19 pandemic has been a pivotal shift in the everyday lives of billions of people. Despite it being one of the biggest health crises in our recent history, the pandemic has also impacted the world economy.

Strict measures have forced many businesses worldwide to stop or limit their activities for a period of time, which expectedly significantly lowered their income.

Australia was not an exception.

It’s also why the Australian government decided to help its citizens by passing laws to boost the economy, helping individuals and small businesses in a time of crisis. More importantly, it focused on stimulating household spending and amortising the negative impacts of the measures taken to combat the novel coronavirus.

Tax Cuts

One of the measures passed by the Australian parliament was a temporary tax relief bill. 7.8 billion Australian dollars from the Australian budget were made to be relocated for implementing this tax offset.

Who is this tax relief for?

It’s called the Low and Middle Income Tax Offset (LMITO). The criteria for people looking to qualify is a person's yearly income. Every person with income lower than $126.000 is eligible to use the benefits from the temporary tax relief. That estimates around 10 million Australians in total.

This law was passed last year in two phases, the first one when it was originally introduced as a tax relief of $540, and then a second phase when this amount was increased up to $1,080. It was initially intended to be a temporary tax cut meant to end on the 30th of June, but it was extended for another financial year due.

What If You Already Lodged Your Tax Return?

It’s well known that all Australian citizens that have an income or earn a salary have an obligation of lodging a tax return. This is true even in cases where your employer is paying your taxes from your monthly wages.

So, what if you earn less than $126,000 annually, belong in the group that should have received a tax offset, but you already lodged your tax return?

The good news is that the tax cut still applies to you.

The Australian Tax Office (ATO) will transfer the extra return provided by the LMITO, calculated based on your annual income. You also don’t need to provide any other documentation or additional information to ATO. Everything will be processed through them, and they will do all the necessary adjustments and rebate what estimated amount belongs to you.

How Much Money Can I Receive?

The maximum amount you can get as a tax offset is $1,080, but this depends on your annual income.

If your taxable income is less than $37,000, you’ll receive an amount of $255.

If you earn between $37,000 and $48,000, you’ll receive $255 plus an additional 7.5 cents for every dollar over the amount of $37, 000. In essence, if you’re earning $48,000, you will receive the maximum amount of $1,080.

People with income between $48,000 and $90,000 are entitled to the maximum amount of $1,080. For people that earn above $90,000 per year (up to $126,000), the amount decreases for 3 cents per every dollar above $90,000.

Putting it simply, the tax offset reduces the amount of tax you need to pay. With the Low and Middle Income Tax Offset, you’ll need to pay less than you were supposed to according to the calculations based on your tax payable income

. However, be warned that if you have a debt with the ATO, the tax offset amount will be used to reduce the initial debt payment and won’t be transferred into your tax refund.


If you’re one of the 10 million Australians that the LMITO applies to, you’ll be able to use the benefits of the permanent tax cuts - even if you already lodged your annual tax return.

While this may seem like a great financial booster, Australian tax laws and policies are part of a complex system that will need some simplification in times of uncertainty.

If you need any advice and help with your taxes, as well as any additional information and clarification about the Low and Middle Tax Offset and how it applies to you, reach out to CapTaxation. Our advisors will be happy to assist you in receiving your due amount!