• Completing reconciliation labels

    You need to complete reconciliation labels in a company, partnership or trust tax return if the PSI rules apply to your income.

    Find out about:

    Showing attributed income from net PSI

    Income you treat as belonging to each individual who generated the personal services income is not your business’s assessable income. The business’s assessable income on the tax return must be reduced by the total amount attributed.

    If you've worked out there is net PSI, you need to show this amount that you've attributed, on your business tax return.

    Company tax return

    Once you have completed item 14 Personal services income:

    • Subtract the amount at label B from label A
    • Include the net amount at item 7 label Q.

    Partnership or trust tax return

    Once you have completed item 30 Personal services income:

    • Subtract the amount at label B from label A
    • Include the net amount at item 5 label A.

    Make sure you print L in the box to the right of label A to reduce the assessable income of the partnership or trust.

    See also:

    Showing non-deductible expenses

    Show any expenses that are not allowable deductions because of the PSI rules at either:

    • item 7 label W on a company return
    • item 5 label B on a partnership or trust return.

    This includes the net PSI loss that each individual is entitled to claim as a deduction. The total amount of deductions the business can claim must be reduced by the total deductions that each individual can claim under the PSI rules.

    See also:

    Showing net PSI losses

    Each individual who generated the personal services income can claim a deduction for the net PSI loss they incurred in the company, partnership or trust on their individual tax return.

    Company tax return

    Once you have completed item 14 Personal services income:

    • subtract the amount at label B from label A
    • include the loss amount with all other non-deductible expenses at item 7 label W.

    Partnership or trust tax return

    • Once you have completed item 30 Personal services income:
    • Include the loss amount with all other non-deductible expenses at item 5 label B.

    Your business cannot use a net PSI loss against any other business income or carry forward the loss. This income must be transferred to the individual and deducted at item D15 Other deductions in their individual tax return.

    See also:

      Last modified: 24 Aug 2016QC 17567