min read
· Posted on
February 21, 2024

Tax 2022: The LMITO and your extra $420 offset

Confused about all these tax offsets and how much you'll get? We've got you.

What's the key learning?

The low and middle income tax offset (aka the LMITO… or the lamington!) was introduced back in 2018 as a nice little kickback for taxpayers. 

But in its final year in action, the LMITO was joined by another one-off payment of $420. That was ScoMo’s last hurrah as PM… and Labor promised to keep it. TY Albo!

If you’re confused about what you will and won’t get, don’t stress. Here’s ya Flux breakdown.

What is the LMITO?

The LMITO helps low-and middle-income earners reduce - or offset - the amount of tax they pay. It works on a sliding scale, so the more you earn, the less you can offset - up to a maximum of $1,080.

The LMITO was introduced way back when ScoMo was Treasurer. It was meant to be a temporary measure, but thanks to COVID, it was extended until June 30 2022. After that, Labor’s confirmed it’s all over, red rover. 

Am I eligible for the LMITO?

To be eligible for the LMITO, you’ll need to: 

  • Be an Australian resident for tax purposes
  • Have paid some income tax this financial year, and
  • Have a taxable income of below $126,000.

But beware! This ain’t a lump sum bonus payment. It’s an offset, which means it can reduce your tax payable until it gets to zero. If it’s already at zero, there’s no change.

What do I need to do to claim the LMITO?

Nada! Literally nothing. The ATO will kindly calculate it for you and take it into account for your potential tax refund.

What’s the $420 cost of living offset?

We all know the cost of living has been skyrocketing (have ya seen lettuce?!), so this year the government is giving us a little treat! If you earn less than $126K you’ll automatically get an additional $420 tax offset

That means if you’re fully eligible for both offsets, this year you’ll actually score $1,500 back at tax time. Nice!

What total tax offset will I get in 2022?

Source: Australian Taxation Office

All information contained in the Flux app is for education and entertainment purposes only. It is not intended as a substitute for professional financial, legal or tax advice. While we do our best to provide accurate information on the podcast, we accept no responsibility for any inaccuracies that may be communicated.

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