• T4 Zone or overseas forces 2016

    Are you entitled to claim for living in a zone or serving in an overseas force?

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

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

    No

    Go to question T5 Total net medical expenses for disability aids, attendant care or aged care 2016, or return to main menu Individual tax return instructions 2016.

    Yes

    Read on.

    Zone tax offset

    Eligibility for the zone tax offset has changed. From 1 July 2015, eligibility is based on your usual place of residence. If your usual place of residence was not in a zone, you are not eligible for the zone tax offset. Certain types of workers are likely to be affected, for example, fly-in-fly-out workers.

    Example

    Michael is a maintenance engineer contractor who lived in Brisbane (not located in a zone) and flew to Blackall in Queensland (located in Zone B) where he worked in the mining industry. As Michael's usual place of residence was not in a zone, he is not eligible for the zone tax offset.

    End of example

     

    Example

    Louie lived in Darwin (located in zone A) and travelled to Kununurra in Western Australia (located in a zone A special area) where he worked in the mining industry. Louie drove to Kununurra, completed a fourteen day shift at the mine, and then drove back to Darwin at the end of his working shift where he remained for sixteen days. As Louie's usual place of residence was in Zone A, he is eligible for the zone tax offset for Zone A.

    End of example

    Remote areas are classed as either Zone A or Zone B. There are also special areas within these zones. If you do not know which zone your area is in, see tables 8, 9 and 10.

    To qualify for the tax offset, your usual place of residence must have been in a remote area (not necessarily continuously) for:

    • 183 days or more during 2015-16, or
    • 183 days or more during the period 1 July 2014 to 30 June 2016 (including at least one day in 2015-16) and you did not claim a zone tax offset in your 2015 tax return.

    If your usual place of residence was in a zone for less than 183 days in 2015-16, you may still be able to claim a tax offset as long as your usual place of residence was in a zone for a continuous period of less than five years after 1 July 2010 and:

    • you were unable to claim in the first year because you lived there less than 183 days, and
    • the total of the days you lived there in the first year and in 2015-16 is 183 or more. The period you lived in a zone in 2015-16 must include the first day of the income year.

    Example

    Gary lived in a remote area from 1 March 2011 to 30 September 2015, a continuous period of less than five years. He couldn’t claim a zone tax offset for the first year because he lived there for only 122 days. However, he could carry forward these unused days to 2015-16. He now adds the number of days from 1 March 2011 to 30 June 2011 (122 days) and the number of days from 1 July 2015 to 30 September 2015 (92 days). As the total (214 days) is ‘183 days or more’ over the two income years, Gary can claim the tax offset on his 2016 tax return.

    End of example

    Overseas forces tax offset

    You may be eligible for an overseas forces tax offset if you served in a specified overseas locality as a member of the Australian Defence Force or a United Nations armed force in 2015-16 and income relating to that service was not specifically exempt from tax. Periods of service for which your income was ‘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 served in a locality that qualifies for the overseas forces tax offset. You can also see which localities qualify for the overseas forces tax offset at Overseas forces tax offset - specified localities or phone 13 28 61.

    To claim the full tax offset, you must have served in the overseas locality for 183 days or more in 2015-16. If your overseas service was less than 183 days, you may be able to claim part of the tax offset. Unlike the zone tax offset, you cannot carry forward any unused days from previous years to make up 183 days.

    If you served in an overseas locality for less than 183 days, but the total number of days served in the overseas locality, when added to the number of days served in one or more zones, is 183 days or more, you may still be entitled to claim the full overseas forces tax offset. 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 claim only one of them. Claim the higher one.

    Completing this item

    The zone or overseas forces tax offset is made up of:

    • a fixed amount
    • a base amount.

    The fixed amount is a prescribed amount available to all people in the zone or overseas area eligible for the tax offset.

    You may be able to include a base amount if you:

    Your fixed and base amounts are determined by your circumstances.

    How to work out your tax offset if your circumstances were simple

    Step 1

    Your tax offset is the amount in Table 1 if:

    • your usual place of residence was in only one zone or you served in only one specified overseas locality for at least 183 days
    • you are not able to include a base amount as
      • you were not entitled to claim the invalid and invalid carer tax offset
      • you either did not have a dependent child or student at any time in 2015-16, or if you did have a dependent child or student, their adjusted taxable income (ATI) was equal to or greater than $282 plus $28.92 for each week you maintained them.
       
    Table 1: Tax offset amounts

    Zone A

    Zone B

    Special
    area

    Overseas
    forces

    $338

    $57

    $1,173

    $338

    Child includes your adopted child, stepchild, ex-nuptial child and child of your spouse. See the definition of child in Special circumstances and glossary 2016.

    A student must be full-time at a school, college or university.

    If you cannot use Table 1 you will need to work through How to work out your offsets if your circumstances were more complex.

    If you received a remote area allowance from Centrelink or the Department of Veterans’ Affairs you must reduce the amount of your zone tax offset by the amount you received for this allowance.

    Step 2

    Write your tax offset amount less any remote area allowance at R item T4 on page 16 of your tax return. Do not show cents. Go to question T5 Total net medical expenses for disability aids, attendant care or aged care 2016.

    How to work out your tax offset if your circumstances were more complex

    You can either use our Zone or overseas forces tax offset calculator on our website or see Working out your total base amount.

    The following information will help you work out your base amount, if any.

    Dependent child or student base amount

    Full-year claim

    Your base amount will include the maximum amount shown in Table 2 for each student under 25 years old on 30 June 2016 in full-time education at a school, college or university, and for each child under 21 years on 30 June 2016 who, for the whole of 2015-16:

    • was treated as an Australian resident
    • was maintained by only you, and
    • had an ATI of less than $286.

    To calculate the ATI see Adjusted taxable income (ATI) for you and your dependants 2016 or use the Income tests calculator.

    If you did not have any dependent children or students, go to Invalid and invalid carer base amount.

    Table 2

    Dependant

    Base amount

    Each student under 25 years old

    $376

    For the oldest non-student child under 21 years old

    $376

    Other non-student children under 21 years old

    $282 for each child

    If all of these requirements were met, add up the base amount for each child or student and write the total at (a) Table 3.

    If two or more people contributed to the maintenance of a dependent child or student, each person can only claim a proportion of the base amount.

    If the requirements were met for only part of the year, or your child’s or student’s ATI for the period you are claiming this base amount in respect of them was $286 or more, you may be able to claim for a part of the base amount. Read on.

    Part-year claim

    You can claim only part of the base amount for dependent children or students if:

    • the child or student was treated as an Australian resident for only part of 2015-16
    • the student was under 25 years old and in full-time education for only part of 2015-16
    • the child or student was maintained by you for only part of 2015-16
    • the child was 21 years old at 30 June 2016 and not in full-time education, or
    • the student was 25 years old at 30 June 2016.

    Use Worksheet 1 to work out the reduced base amount for each eligible dependent child or student as described in Table 2.

    Worksheet 1

    Maximum base amount for the child or student from table 2

    $

    (a)

    Number of days you maintained your child or student and your child or student was an eligible dependant

     

    (b)

    Number of days in 2015-16

    366

    (c)

    Divide (b) by (c).

    $

    (d)

    Multiply (d) by (a).

    $

    (e)

    If the ATI of your child or student was less than $286 for the period you are claiming this base amount in respect of them, transfer amount (e) above to (a) Table 3.

    If you had more than one eligible child or student and the ATI of each one was less than $286 for the period you are claiming this base amount in respect of them, work out the amount for each child and student, add up all the amounts and write the total at (a) Table 3.

    If ATI was $286 or more for the period you maintained them

    You cannot claim any base amount for your child or student if that child or student had an ATI equal to or greater than:

    • the total of $282 plus $28.92 for each week you maintained them for a student under 25 years old or for the oldest child under 21 years old who is not a student, or
    • the total of $282 plus $21.70 for each week you maintained them for any other child under 21 years old who is not a student.

    If your child’s or student’s ATI for the period you are claiming this base amount in respect of them was $286 or more but less than the limits shown, use Worksheet 2 to work out the base amount.

    Worksheet 2

    Base amount for the child or student from Table 2 or (e) Worksheet 1 for a part-year claim

    $

    (a)

    Your child’s or student’s ATI for the period you maintained them

    $

    (b)

    Income above which the base amount begins to reduce

    $282

    (c)

    Take (c) away from (b).

    $

    (d)

    Divide (d) by 4 because your base amount is reduced by $1 for every $4 of ATI over $282. Do not show cents.

    $

    (e)

    Take (e) away from (a). Show zero (0) if the amount is negative. Do not show cents..

    $

    (f)

    Transfer the amount at (f) above to (a) Table 3. If you had more than one eligible child or student, work out the amount for each child or student, add up all the amounts and write the total at (a) Table 3.

    Sole parent base amount

    If you had sole care of a dependent child or student and you have written an amount of at least $1 at (a) Table 3 (base amount for dependent children or students), you may also be eligible for a sole parent base amount.

    You can only claim this base amount if you were a sole parent at any time during the income year and:

    • your usual place of residence was in a remote area of Australia, or
    • you served overseas as a member of the Australian Defence Force.

    Sole care means that you alone had full responsibility on a day-to-day basis for the upbringing, welfare and maintenance of a child or student. We do not consider you to have had sole care if you were living with a spouse (married or de facto) during the year unless special circumstances exist.

    You will need to use Worksheet 3 to calculate a part-year sole parent base amount claim.

    Special circumstances

    If you had a spouse (married or de facto) at any time during 2015-16, you are entitled to a sole parent base amount only in special circumstances.

    Generally, for special circumstances to exist, you must have been financially responsible for and have had sole care of the dependent child or student, without the support a spouse normally provides.

    Examples of situations where special circumstances may arise:

    • You were married or in a de facto relationship at any time during 2015-16, but during the year you separated from or were deserted by your spouse, and for the period that you will claim the sole parent base amount you were not in a de facto relationship.
    • Your spouse was in prison for a sentence of at least 12 months.
    • Your spouse was medically certified as being permanently mentally incapable of taking part in caring for your child or student.

    If you are unsure whether special circumstances applied, then phone 13 28 61.

    Shared or joint custody after a relationship breakdown

    There are times, after a relationship breakdown, such as a divorce or separation, where both parents share the custody of a child or student. If you can show that you had sole care of a dependent child or student for part of the year, you may be able to claim the base amount for that part of the year. This means more than just having access visits with the child or student.

    We consider you to have had sole care of the child or student for the part of the year up to the day the child turned 21 years old or the student turned 25 years old if the dependant:

    • was not receiving full-time education and turned 21 years old during 2015-16, or
    • was a full-time student and turned 25 years old during 2015-16.

    You are only entitled to claim the base amount for that part of the year before the birthday.

    If you had sole care of a child or student for the whole of 2015-16, write $1,607 at (b) Table 3.

    Worksheet 3

    Sole parent base amount, part-year claim

    Number of days you had sole care of a child or student

    $

    (a)

    Multiply (a) by $4.39.

    $

    (b)

    Transfer the amount at (b) above to (b) Table 3.

    Invalid and invalid carer base amount

    If you are entitled to a tax offset at T6 Invalid and invalid carer you are entitled to this base amount. To be eligible you must have maintained:

    • your spouse who was an invalid or cared for an invalid, or
    • your or your spouse's parent, who lived in Australia and who was an invalid or cared for an invalid, or
    • your or your spouse’s invalid child aged 16 years or older, or brother or sister aged 16 years or older

    Use our calculator to determine if you are eligible for this offset and the amount you are entitled to claim. Alternatively, if you wish to manually calculate your entitlement go to T6 Invalid and invalid carer 2016.

    If you are entitled to an offset at T6 Invalid and invalid carer, write the amount you calculated at (c) Table 3.

    Working out your total base amount

    Use Table 3 to work out your total base amount.

    Table 3

    Total base amount

    Dependent children or students, from Table 2, Worksheet 1 or Worksheet 2

     

    (a)

    Sole parent

     

    (b)

    Amount claimed at item T6 Invalid and invalid carer tax offset

     

    (c)

    Add up all of these amounts.

    $

    (d)

    The amount at (d) is your total base amount.

    Read on.

    You use the information from Table 4 when you complete either table 5 or 6.

    Table 4

     

    Fixed amount

    Percentage of
    base amount

    Zone A

    $338

    50%

    Zone B

    $57

    20%

    Special area

    $1,173

    50%

    Overseas forces

    $338

    50%

    Final calculation

    Multiple locations

    Check table 4 if:

    • your usual place of residence was in more than one zone or special area, or
    • you serve in specified overseas localities, and
    • you were in one of them for 183 days or more.

    If the fixed amount for that zone is higher than for the other zones where you were, use that fixed amount and Table 5 to work out your tax offset. This will give you the greatest benefit.

    Otherwise go to Category 2.

    Example

    Neil's usual place of residence was in zone A for 190 days and in Zone B for 40 days. Table 4 shows that the fixed amount for Zone A is higher than the Zone B amount. Neil uses the Zone A amount because this will give him the greater benefit. He ignores the time that his usual place of residence was in Zone B.

    End of example
    Category 1

    Your usual place of residence was only in one zone or you served only in specified overseas localities for at least 183 days.

    Step 1

    Complete table 5.

    Table 5

    Your fixed amount from table 4

    $

    (a)

    Your base amount from (d) table 3

    $

    (b)

    Multiply (b) by the percentage figure from table 4.

    $

    (c)

    Add (a) and (c).

    $

    (d)

    If you are claiming an overseas forces tax offset, the amount you can claim is (d). Go to step 2.

    If you are claiming a zone tax offset, read on.

    Any remote area allowance you received.

    $

    (e)

    Take (e) away from (d) and write the answer at (f)

    $

    (f)

    The amount at (f), if it is more than zero (0), is your zone tax offset. Go to step 2.

    Step 2

    Write your zone or overseas forces tax offset amount at R item T4 on your tax return. Do not show cents. Go to question T5 Total net medical expenses 2016.

    Category 2

    Your usual place of residence was in more than one zone, or you:

    • served in a specified overseas locality for less than 183 days, or
    • served in a specified overseas locality and you served in one or more zones for a total of at least 183 days.

    You claim for the number of days in each eligible place divided by 183, to a maximum of 183 days for a year. Start with your zone that has the highest fixed amount in Table 4. This will give you the greatest benefit.

    Example 1

    Your usual place of residence was in zone A for 100 days and 120 days in zone B. You would claim 100 ÷ 183 days for zone A and 83 ÷ 183 days for zone B.

    End of example

     

    Example 2

    You served 100 days in a specified overseas locality. You would claim 100 ÷ 183 days.

    End of example

     

    Example 3

    You served 100 days in an overseas locality as a member of the defence forces and served a further 83 days or more in a zone. You would claim the full overseas forces tax offset.

    End of example

     

    Example 4

    You served 100 days in an overseas locality and your usual place of residence was in a special area for 185 days. As the special area in Table 4 shows the highest fixed amount and you use up the maximum 183 days for this, you would simply claim the full special area amount and ignore the 100 days in an overseas locality.

    End of example

    Step 1

    Use Table 6 to work out your claim for each zone, special area or overseas locality you were in (as in the examples).

    Table 6

    Your fixed amount from Table 4

    $

    (a)

    Your base amount from (d) Table 3

    $

    (b)

    Multiply (b) by the percentage figure from Table 4.

    $

    (c)

    Add (a) and (c).

    $

    (d)

    Number of days your usual place of residence was in a zone or special area or you served in an overseas locality, to a maximum of 183 days (see the examples)

    $

    (e)

    Multiply (d) by (e).

    $

    (f)

    Divide (f) by 183. This is the amount you can claim.

    $

    (g)

    Step 2

    Once you have worked out the amount you can claim for each place, add up all the amounts and then use Table 7 to work out your total tax offset.

    Table 7

    Total of the amounts you have worked out for each zone from (g) Table 6.

    $

    (a)

    If you are claiming an overseas forces tax offset, the amount you can claim is (a). Go to step 3.

    If you are claiming a zone tax offset, read on.

    Any remote area allowance you received

    $

    (b)

    Take (b) away from (a). This is the amount you can claim.

    $

    (c)

    The amount at (c), if it is more than zero (0), is the total of your zone tax offset. Go to step 3.

    Step 3

    Write your zone or overseas forces total tax offset amount at R item T4. Do not show cents. Go to question T5 Total net medical expenses for disability aids, attendant care or aged care 2016.

    Selected localities within the zones and special areas

    Table 8: Zone A

    Western Australia

    Northern Territory

    Bidyadanga (Lagrange)

    Alice Springs*

    Broome*

    Batchelor

    Carnarvon

    Darwin

    Dampier

    Hermannsburg

    Derby

    Katherine*

    Goldsworthy

    Pine Creek

    Karratha

    Santa Teresa

    Marble Bar

    Tindal

    Newman*

     

    Pannawonica

     

    Paraburdoo

     

    Port Hedland*

    Queensland

    Roebourne

    Camooweal

    Shay Gap

    Cloncurry

    Tom Price*

    Mount Isa*

    Wittenoom

     

    * Locations within 250 kilometres of these localities are also in the relevant zone.

    Table 9: Zone B

    Western Australia

    Queensland

    Boulder

    Airlie Beach

    Coolgardie

    Atherton

    Esperance

    Augathella

    Kalgoorlie*

    Ayr

    Kambalda

    Barcaldine

    Leonora

    Blackall

    Mullewa

    Bowen

    Norseman

    Cairns

    Northampton

    Cardwell

    Ravensthorpe

    Charleville

    Southern Cross

    Charters Towers

     

    Clifton Beach

    New South Wales

    Collinsville

    Bourke

    Coppabella

    Brewarrina

    Cunnamulla

    Broken Hill

    Greenvale

    Cobar

    Home Hill

    Collarenebri

    Ingham

    Lightning Ridge

    Innisfail

    Menindee

    Longreach

    Wilcannia

    Mackay

     

    Mareeba

     

    Mossman

    Tasmania

    Port Douglas

    Queenstown

    Proserpine

    Rosebery

    Quilpie

     

    Sarina

     

    Tambo

    South Australia

    Townsville

    Woomera

    Tully

     

    Winton

    * Locations within 250 kilometres of these localities are also in the relevant zone.

    Table 10: Special areas

    Western Australia

    Queensland

    Balladonia

    Boulia

    Deakin

    Burketown

    Denham

    Cooktown

    Eucla

    Doomadgee

    Exmouth

    Georgetown

    Fitzroy Crossing

    Helen Vale

    Halls Creek

    Hughenden

    Kununurra

    Julia Creek

    Laverton

    Karumba

    Leinster

    Kowanyama

    Madura

    Normanton

    Meekatharra

    Stamford

    Mount Magnet

    Thargomindah

    Onslow

    Weipa

    Rawlinna

    Windorah

    Turkey Creek (Bow River)

     

    Wiluna

     

    Wyndham

    South Australia

     

    Amata Aboriginal Community

     

    Coober Pedy

    Northern Territory

    Cook

    Alyangula

    Innamincka

    Angurugu

    Leigh Creek

    Borroloola

    Marree

    Elliott

    Nullarbor

    Galiwinku

    Oodnadatta

    Jabiru

    Penong

    Lajamanu (Hooker Creek)

    Roxby Downs

    Maningrida

    Tarcoola

    Milikapiti

     

    Milingimbi

     

    Nguiu

    New South Wales

    Ngukurr

    White Cliffs

    Nhulunbuy (Gove)

     

    Numbulwar

     

    Oenpelli

    Islands and territories

    Papunyah

    Australian Antarctic Territory

    Ramingining

    Cocos (Keeling) Islands

    Tennant Creek

    Heard Island

    Yirrkala

    Lord Howe Island

    Yuendumu

    Macquarie Island

    Yulara

    McDonald Islands

     

    Norfolk Island

     

    Palm Isles Group

    Tasmania

     

    Furneaux Group Islands

     

    King Island

     

    There are also other locations that may be in a zone or special area. If you are unsure, phone 13 28 61.

    Where to go next

      Last modified: 26 May 2016QC 48769