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Tax implications for workers with COVID-19 mobility restrictions

Employees who are not living or working in their regular location due to COVID-19 mobility restrictions need to be aware of the tax implications that apply to their situation.

Individuals who ordinarily work and live in Australia but are temporarily overseas due to COVID-19 restrictions will not experience any changes to their Australian tax obligations. If the employee is paying foreign income tax overseas, they will receive a foreign income tax offset to reduce their Australian tax payable.

Foreign residents working from Australia who are not able to leave as a result of COVID-19 restrictions will not experience Australian tax impacts if their stay in the country is under three months. However, non-residents working in Australia for longer than three months may need to lodge an Australian tax return if they earn any assessable income from an Australian source. Other than this, their Australian tax obligations will remain unchanged.

Employment income will not be taxable in Australia if the employee:

Employees who typically reside in a country that Australia has a double tax agreement with may already qualify for an exemption in Australia.

Posted on 19 May '20 by , under Tax.

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Spouse contributions – when are you eligible for a tax offset?

Contributions made on behalf of your spouse to a complying superannuation fund or a retirement savings account (RSA) may be eligible for a tax offset.

The 2019/2020 tax rules allow you to claim an 18% tax offset on super contributions up to $3,000 on behalf of your spouse. While you are able to contribute more than $3,000, there will be no spouse contribution tax offset over this amount. The amount you can claim depends on your spouse's annual income:

  • $540 for spouse income of $37,000.
  • $360 for spouse income of $38,000.
  • $180 for spouse income of $39,000.

The tax offset may be available for individuals who meet the following eligibility requirements:

  • Your spouse's assessable income, fringe benefits amounts and employer superannuation contributions equate to under $40,000.
  • Contributions made on behalf of your spouse were not deductible to you.
  • You and your spouse were Australian residents at the time of contributions.
  • Your spouse did not have non-concessional contributions that equated to a higher amount than their non-concessional contributions cap, or they did not have a total superannuation balance of $1.6 million or more at 30 June 2018.
  • Your spouse is younger than their preservation age, or are not retired while being between 65 and their preservation age.

Under Australian superannuation law, your spouse can be either:

  • Your partner who you are married to and live with, or;
  • Your de facto partner, who you live with on a genuine domestic basis.

The spouse contributions tax offset can be claimed on your tax return.

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