Withholding declaration

Question 8

This question has been removed.

Family tax benefit cannot be claimed through the tax system from 1 July 2008. Claims for family tax benefit should be made through the Family Assistance Office.

Question 9
Do you want to claim or vary your dependent spouse, zone, overseas forces or special tax offset entitlement by reducing the amount withheld from payments made to you?

There are three categories of tax offsets in this section:

• Dependent spouse tax offset
• Zone or overseas forces tax offset
• Special tax offsets (including those for a dependent parent, spouse’s parent or invalid relative, housekeeper, or child-housekeeper).

Income test From 1 July 2009 the following changes apply: special tax offsets can only be claimed by taxpayers where the combined adjusted taxable income of the taxpayer and their spouse is $150,000 or less dependant spouse tax offset can only be claimed where the adjusted taxable income of the taxpayer is $150,000 or less and the spouse’s adjusted taxable income is expected to be less than $9,254 for the income year ended June 2010. For more information, refer to Changes to income tests (NAT 72974).

Answer ‘NO’ if you are not entitled to claim any of these tax offsets, or you want to claim your entitlement as a lump sum at the end of the income year.

Answer ‘YES’ if you want to claim your entitlement to any of these tax offsets by reducing the amount withheld from payments made to you. You will need to calculate your estimated entitlement by working through the calculation tables provided and then transfer your total tax offsets to question 9 on the Withholding declaration.

Non-residents If you are not a resident of Australia for tax purposes, you are not entitled to claim a dependent spouse tax offset or a special tax offset. You may be entitled to claim the zone or overseas forces tax offset.

Rates may change The income thresholds and tax offset rates stated in this section are for the income year ending 30 June 2010. These amounts are subject to annual indexation.

Question 9(a)
Dependent spouse tax offset

Do you have a dependent spouse with an adjusted taxable income of less than $9,254?

Refer to Income test at the beginning of question 9.

Your spouse includes another person (whether of the same or opposite sex):

• to whom you are legally married
• who is in a relationship with you that is registered under a prescribed state or territory law
• who you live with on a genuine domestic basis as a couple.

Adjusted taxable income includes your:

• taxable income
• adjusted fringe benefits (reportable fringe benefits multiplied by 0.535)
• tax-free pensions or benefits
• target foreign income
• deductible child maintenance expenditure
• reportable super contributions
• total net investment losses.

You cannot claim a dependent spouse tax offset if:

• you answer ‘NO’ to this question
• you or your spouse are eligible for family tax benefit Part B at the 100% FTB shared care percentage
• you are not an Australian resident for tax purposes.

Do not complete this section – go to question 9(b) Zone or overseas forces tax offset.

If you answer ‘YES’, you may be entitled to a dependent spouse tax offset. If you are entitled to claim a dependent spouse tax offset, you will need to complete table A.

Read the following instructions to help you complete steps 1 to 6.

Step 1: Your maximum tax offset

Are you (or your spouse) eligible for family tax benefit Part B?

If your answer is ‘NO’, your maximum tax offset is $2,243. Insert this amount at step 1 in table A. Go to step 2.

If your answer is ‘YES’, and your family tax benefit Part B entitlement is based on a dependant who is subject to a shared care arrangement, the maximum tax offset is reduced by the FTB shared care percentage of the child.

You had shared care if you and your spouse (if you had one) cared for your child for some of the income year and someone else, such as a former spouse, cared for the child for the rest of the income year.

For example, if you are entitled to family tax benefit Part B based on a dependant who has an FTB shared care percentage of 50%, the maximum tax offset figure of $2,243 is reduced by 50%. Your reduced maximum tax offset at step 1 in table A would be $1,121.

Need help? If you do not know your FTB shared care percentage, phone the Family Assistance Office on 13 61 50 between 8.00am and 8.00pm, Monday to Friday.

Step 2: Your spouse’s adjusted taxable income (ATI)

If your spouse’s adjusted taxable income is less than $286, you are entitled to a dependent spouse tax offset equivalent to your amount at step 1. Transfer this amount to A in table J. This is your dependent spouse tax offset. You do not need to complete steps 3, 4 and 5. Go to question 9(b) Zone or overseas forces tax offset.

If your spouse’s adjusted taxable income is $286 or more and less than $9,254, you may be able to claim a partial tax offset. Insert your spouse’s adjusted taxable income amount at step 2 in table A. Go to step 3.

Steps 3, 4 and 5: Tax offset reduction calculation

The tax offset reduces by $1 for every $4 of your spouse’s adjusted taxable income that is over $282.

Complete steps 4 and 5 in table A to calculate the reduction in your tax offset.

Step 6: Your dependent spouse tax offset

If your spouse’s adjusted taxable income is $286 or more, take away your amount at step 5 from your amount at step 1. This is your dependent spouse tax offset. Transfer this amount to A in table J. Go to question 9(b) Zone or overseas forces tax offset.

Table A: Dependent spouse tax offset calculation

Step 1	Maximum tax offset ($2,243, or reduced maximum tax offset)	$	This is your dependent spouse tax offset if your spouse’s adjusted taxable income is less than $286.	(A)
Step 2	Your spouse’s adjusted taxable income, if $286 or more	$
Step 3	ATI at which tax offset begins to reduce	$282	or
Step 4	Take the amount at step 3 from the amount at step 2	$
Step 5	Divide the amount at step 4 by 4 – do not show cents	$ .
Step 6	Take away the amount at step 5 from the amount at step 1	$	This is your dependent spouse tax offset if your spouse’s adjusted taxable income is $286 or more.	(A)

Question 9(b)
Zone or overseas forces tax offset

Entitlement

You may be able to claim a tax offset if you:

• live or work in a remote or isolated area of Australia, not including an offshore oil or gas rig
• serve overseas as a member of the Australian Defence Force or a United Nations armed force.

Zone Tax Offset

Remote areas

Remote areas are divided into two zones called zone A and zone B. There are also special areas within these zones. You will need to work out which zone (A or B) or special area you are in, as different zone allowances apply to each of these areas.

Selected localities are listed within the zones or special areas. There are also other locations that may be in a zone or special area.

If you do not live or work in a valid remote area, you cannot claim the zone tax offset.

Selected localities within the zones and special areas

Locations that are within 250 radial kilometres of the asterisked (*) locations are also in the relevant zone.

Zone A

Western Australia	Northern Territory	Queensland
Bidyadanga	Alice Springs*	Camooweal
(Lagrange)	Batchelor	Cloncurry
Broome*	Darwin	Mount Isa*
Carnarvon	Hermannsburg
Dampier	Katherine*
Derby	Pine Creek
Goldsworthy	Santa Teresa
Karratha	Tindal
Marble Bar
Newman*
Pannawonica
Paraburdoo
Port Hedland*
Roebourne
Shay Gap
Tom Price*
Wittenoom

Zone B

Western Australia	New South Wales	Queensland
Boulder	Bourke	Airlie Beach
Coolgardie	Brewarrina	Atherton
Esperance	Broken Hill	Augathella
Kalgoorlie*	Cobar	Ayr
Kambalda	Collarenebri	Barcaldine
Leonora	Lightning Ridge	Blackall
Mullewa	Menindee	Bowen
Norseman	Wilcannia	Cairns
Northampton		Cardwell
Ravensthorpe		Charleville
Southern Cross		Charters Towers
		Clifton Beach
South Australia	Tasmania	Collinsville
Woomera	Queenstown	Cunnamulla
	Rosebery	Greenvale
		Home Hill
		Ingham
		Innisfail
		Longreach
		Mackay
		Mareeba
		Mossman
		Port Douglas
		Proserpine
		Quilpie
		Sarina
		Tambo
		Townsville
		Tully
		Winton

Contact us if you are unsure whether a location is in a zone or special area.

Special areas

Western Australia	Northern Territory	Queensland
Balladonia	Alyangula	Boulia
Deakin	Angurugu	Burketown
Denham	Borroloola	Cooktown
Eucla	Elliott	Doomadgee
Exmouth	Galiwinku	Georgetown
Fitzroy Crossing	Jabiru	Helen Vale
Halls Creek	Lajamanu/Hooker Creek	Hughenden
Kununurra	Maningrida	Julia Creek
Laverton	Milikapiti	Karumba
Leinster	Milingimbi	Kowanyama
Madura	Nguiu	Normanton
Meekatharra	Ngukurr	Stamford
Mount Magnet	Nhulunbuy (Gove)	Thargomindah
Onslow	Numbulwar	Weipa
Rawlinna	Oenpelli	Windorah
Turkey Creek (Bow River)	Papunyah
Wiluna	Ramingining
Wyndham	Tennant Creek
	Yirrkala
	Yuendumu
	Yulara
South Australia	Islands and territories	Tasmania
Amata Aboriginal Community	Australian Antarctic Territory	Furneaux Group Islands
Coober Pedy	Cocos (Keeling) Islands	King Island
Cook	Heard Island
Innamincka	Lord Howe Island	New South Wales
Leigh Creek	Macquarie Island	White Cliffs
Marree	McDonald Islands
Nullarbor	Norfolk Island
Oodnadatta	Palm Isles Group
Penong
Roxby Downs
Tarcoola

Conditions you need to meet to qualify for a zone tax offset

If you live or work in a remote area, you also need to meet the following conditions to qualify for a zone tax offset.

You must live or work in a remote area (not necessarily continuously) for either:

• 183 days or more during 2009–10
• 183 days or more during the period 1 July 2008 to 30 June 2010 (including at least one day in this income year) and you did not claim a zone tax offset in your 2008–09 tax return.

If you live in a zone for less than 183 days in 2009–10, you may still be able to claim a tax offset as long as you meet the following three conditions:

• you lived in a zone for a continuous period of less than five years after 1 July 2004
• the total of the days you were there in the first year and in 2009–10 is 183 or more
• you could not claim a zone tax offset in that first year because you were there less than 183 days.

If you do not meet the above time conditions, you cannot claim the zone tax offset.

Example

Gary lived in a remote area from 1 March 2005 to 30 September 2009, a continuous period of less than five years. He could not claim a zone tax offset for the first year because he had lived there for only 122 days. However, he could carry forward these unused days to 2009–10.

He now adds the number of days from 1 March 2005 to 30 June 2005 (122) and the number of days from 1 July 2009 to 30 September 2009 (92). As the total (214) is more than 183 days (over the two income years), Gary can claim the tax offset in his 2009–10 tax return.

Overseas forces tax offset

Conditions you need to meet to qualify for an overseas forces tax offset

You may be eligible for an overseas forces tax offset if you serve in a specified overseas locality as a member of the Australian Defence Force or a United Nations armed force in 2009–10 and income relating to that service is not specifically exempt from tax. Periods of service for which your income is exempt foreign employment income are excluded in working out your eligibility for the tax offset. Your employer will be able to advise you whether you serve in a locality which qualifies for the overseas forces tax offset.

Contact us to get details of localities that qualify for the overseas forces tax offset.

To claim the full tax offset, you must serve in the overseas locality for 183 days or more in 2009–10. Unlike the zone tax offset, you cannot carry forward any unused days from previous years to make up 183. However, if your overseas service is less than 183 days, you may be able to claim part of the tax offset.

You may still be entitled to claim the full overseas forces tax offset if you serve in an overseas locality for less than 183 days and the total number of days served, when added to the number of days spent in one or more zones, is 183 days or more. If you served as a member of the Australian Defence Force, days spent in a zone must be defence force service.

If you qualify for both an overseas forces tax offset and a zone tax offset, you can only claim one of them. Claim the higher one.

Calculation of zone or overseas forces tax offset

If you are entitled to claim a zone or overseas forces tax offset, read below to find out how to calculate your offset.

1 Notional spouse (and spouse with child) tax offsets

If you have a dependent spouse, you may be entitled to claim a notional spouse tax offset as a component of your zone or overseas forces tax offset.

Alternatively, you may be able to claim a notional spouse with child tax offset if you have a dependent child or student.

Refer to Income test at the beginning of question 9. For the definition of spouse refer to question 9(a).

Do you have a dependent spouse?

If you answer ‘NO’, insert ‘0’ at B in table E.

If you have a dependent child or student, go to 2 Do you have dependent children or students?

If you do not have a dependent child or student, go to 3 Total zone or overseas forces tax offset components.

If you answer ‘YES’, and you do not have a dependent child or student and your spouse has adjusted taxable income of less than $9,254, complete column 1 of table B.

If you have a dependent child or student, and your spouse has adjusted taxable income of less than $10,706, complete column 2 of table B.

A dependent child must:

• be under 21
• not be a student
• be treated as an Australian resident
• have a yearly adjusted taxable income of less than $1,786
• be maintained by you.

A dependent student must:

• be under 25
• be a full-time student at school, college or university
• be treated as an Australian resident
• have adjusted taxable income of less than $1,786
• be maintained by you.

Table B: Notional spouse tax offset component

Tax offset entitlement		Column 1 Notional spouse tax offset Work out your zone or overseas forces tax offset if you do not have a dependent child or student.	Column 2 Notional spouse with child offset Work out your zone or overseas forces tax offset if you have a dependent child or student.
Step 1	Maximum offset	$2,243	$2,606
Step 2	Your spouse’s adjusted taxable income	$	$
Step 3	Income after which tax offset begins to reduce	$282	$282
Step 4	Take the amount at step 3 from the amount at step 2	$	$
Step 5	Divide the amount at step 4 by 4 – do not show cents	$ .	$ .
Step 6	Take the amount at step 5 from the amount at step 1	$	$

If your dependent spouse or dependent child or student’s adjusted taxable income is more than the maximum threshold, insert ‘0’ at B in table E.

Complete steps 2, 4, 5 and 6 for column 1 or 2, and transfer your step 6 amount to B, table E.

2 Do you have dependent children or students?

If you answer ‘NO’, insert ‘0’ at A in table E. Go to 3 Total zone or overseas forces tax offset components.

If you answer ‘YES’, the relevant maximum tax offsets are shown in table C. You cannot claim for a dependant if their adjusted taxable income is higher than the cut-off amount in this table.

In table D, list the names and ages of your dependent children or students who do not have an adjusted taxable income that is higher than the relevant cut-off amount shown in table C. If there is not enough space, attach an additional sheet of paper.

For each dependent child or student with adjusted taxable income of $285 or less, ignore steps 1 to 5. Find the relevant maximum tax offset shown in table C and insert that amount at step 6, table D.

Table C: Maximum tax offset

	Maximum	Tax offset reduces if adjusted taxable income exceeds	Tax offset cuts out if adjusted taxable income exceeds
First child under 21 who is not a student	$376	$285	$1,785
Each other child under 21 who is not a student	$282	$285	$1,409
Student under 25 receiving full-time education	$376	$285	$1,785

For each dependent child or student with adjusted taxable income of more than $285 but less than the relevant cut-off amount shown in table C, you may claim a partial tax offset. The tax offset reduces by $1 for every $4 of your dependant’s adjusted taxable income over $282. Work out the reduced tax offset by completing steps 2 to 6 in table D.

Table D: Dependent children or student component

		Dependant 1 Name: Age:	Dependant 2 Name: Age:	Dependant 3 Name: Age:	Dependant 4 Name: Age:
Step 1	Maximum tax offset	$	$	$	$
Step 2	Your dependant’s adjusted taxable income	$	$	$	$
Step 3	Income after which tax offset begins to reduce	$282	$282	$282	$282
Step 4	Take the amount at step 3 from the amount at step 2	$	$	$	$
Step 5	Divide the amount at step 4 by 4 – do not show cents	$ .	$ .	$ .	$ .
Step 6	Take the amount at step 5 from the amount at step 1	$	$	$	$	$
Transfer your total step 6 amount to A in table E.						Total step 6

3 Total zone or overseas forces tax offset components

If you are a sole parent with one or more dependent children, a notional sole parent tax offset of $1,607 applies at C in table E.

Items D, E, F and G relate to question 9(c) Special tax offsets.

Table E: Total zone or overseas forces tax offset components

	Amount claimed
Total amount for dependants at step 6 in table D	$A
Notional spouse tax offset from column 1 or 2, step 6, in table B	$B
Notional sole parent tax offset of $1,607 (if applicable)	$C
See housekeeper tax offset	$D
See child-housekeeper tax offset	$E
See invalid relative tax offset	$F
See parent or spouse’s parent tax offset	$G
Add the amounts at A to G	$H

Transfer the amount at H above to ‘Total from H, table E’ in table F, in the appropriate column for your zone (Zone A/overseas forces, Zone B or Special area).

Table F: Zone or overseas forces tax offset calculation

	Zone A/ overseas forces		Zone B		Special area
Total from H, table E	$	Total from H, table E	$	Total from H, table E	$
Divide by 2	$	Divide by 5	$	Divide by 2	$
Add zone allowance	$338	Add zone allowance	$57	Add zone allowance	$1,173
Zone or overseas forces tax offset	$ (B)	Zone tax offset	$ (B)	Zone tax offset	$ (B)

Transfer your zone or overseas forces tax offset amount at (B) above to B in table J.